Block Chain Markets During COVID-19. From the Perspective of Market Efficiency and Behavioral Finance

Abstract

The Corona crisis adversely affected the financial system. Investor’s behavior tends to change in periods of crisis. Therefore, current study investigated top five cryptocurrency market efficiency and its association with behavioral finance in terms of investor irrational behavior during COVID-19. Current study followed parametric or non-parametric techniques for analysis of weak form market efficiency for time period Jan 2020 till July 2020 using Statgraphics 18 and EVIEWS. Findings of study suggest that markets are inefficient during the corona crisis. This research paper provides implication both theoretically and on the regulatory authorities. Future research should consider all fifty markets in order to check validity of efficient market hypothesis. Clemente, Montañ és, and Reyes (1998) tests are constructed on the basis of the advanced outlier and additive outliers. Future study should consider pre post analysis in order to draw compression for better results. Current study provides fruitful information for policy makers and regulatory authorities for decision making. Although findings of current study are introductory in nature as this study measures the presence of EMH in block chain markets. This study also provides theoretical implications.