Herding behavior in cryptocurrency market before and during COVID-19

Resumen

This research was conducted to investigate herding behavior in the cryptocurrency market before and during the Covid-19 pandemic. This study used secondary data in the form of monthly price movements of five cryptocurrencies with the largest capitalization values; Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Tether (USDT), and Binance Coin (BNB), as well as cryptocurrency hedge funds data between January 2013 - December 2022. The data was then analyzed using the Cross-Sectional Absolute Deviation (CSAD) formula to find potential herding behavior. The results of this study indicate that there was no herding behavior in the cryptocurrency market either before or during the Covid-19 pandemic; investors tended to be rational in carrying out investment actions and not imitate or be influenced by the actions of other investors, and they paid attention to fundamental and technical information before making investment decisions.