Speculation, Bitcoin, and Prospect Theory

UNIVERSITY OF TECHNOLOGY SYDNEY
Finance Department
Research Seminars in Finance

Chishen Wei

Topic: Speculation, Bitcoin, and Prospect Theory

Speaker: Chishen Wei, Singapore Management University

Abstract: We examine whether the speculative frenzy in Bitcoin and cryptocurrencies spills over into equity markets. We find that stocks that have non-fundamental return co-movement with Bitcoin exhibit temporary over-valuation and subsequent return reversal that exceeds −1% per month. The results are best explained by speculative demand from retail investors who overpay for long-shot bets. Additional analysis indicates that investors evaluate these stocks in a way that is consistent with the probability weighting, narrow framing, and reference point features of prospect theory.

Moderator: Kenny Phua, University of Technology Sydney

Date: Wednesday, 4th August 2021
Time: 12-1 pm (Australian Eastern Standard Time)
Venue: This is on online Zoom webinar.

After registering, you will receive a confirmation email containing information on how to join the meeting, including an access link.

Seminar protocols:

  • The webinar will run for 45 minutes, followed by a 15 minute Q&A session.
  • There will be a moderator for each seminar event, who will facilitate communication and resolve any technical issues.
  • Participants can use the chat facility or raise their had to ask questions during the presentation. The moderator will then alert the speaker at the appropriate time and either ask the questions raised or unmute the participant so they can ask the question directly to the presenter.

Co-ordinator: Harry Scheule

Enquiries: Duncan Ford

Back to Finance seminars
Acknowledgement of Country

UTS acknowledges the Gadigal people of the Eora Nation, the Boorooberongal people of the Dharug Nation, the Bidiagal people and the Gamaygal people, upon whose ancestral lands our university stands. We would also like to pay respect to the Elders both past and present, acknowledging them as the traditional custodians of knowledge for these lands.