Understanding digital bubbles amidst the COVID-19 pandemic: Evidence from DeFi and NFTs
This paper investigates digital financial bubbles amidst the COVID-19 pandemic. Using a sample of 9 DeFi tokens, 3 NFTs, Bitcoin, and Ethereum, we detect several bubbles overlapping the examined cryptoassets. We also uncover DeFi and NFT-specific bubbles in Summer 2020 suggesting distinct driving factors for this class of assets. We document that DeFi and NFTs bubbles are less recurrent but have higher magnitudes than cryptocurrencies’ bubbles. We also find that COVID-19 and trading volume exacerbate bubble occurrences, while Total Value Locked (TVL) is negatively associated with cryptoassets’ bubbles. Our results suggest that TVL can be used as a tool for market monitoring.
Other Information
Published in: Finance Research Letters
License: http://creativecommons.org/licenses/by/4.0/
See article on publisher's website: https://dx.doi.org/10.1016/j.frl.2021.102584
Funding
Open Access funding provided by the Qatar National Library
History
Language
- English
Publisher
ElsevierPublication Year
- 2022
License statement
This Item is licensed under the Creative Commons Attribution 4.0 International LicenseInstitution affiliated with
- Qatar University
- College of Business and Economics - QU
