Listening to the market: music sentiment and cryptocurrency returns
Listening to the market: music sentiment and cryptocurrency returns
This paper investigates how investor sentiment, captured through a novel Spotify-based mood metric, influences the cross-sectional pricing of cryptocurrencies. Drawing on behavioral finance and psychological theories, we hypothesize that emotional states reflected in musical choices influence cryptocurrency returns. Using weekly data from 2,551 cryptocurrencies over five years, we find that sensitivity to music sentiment significantly predicts future returns. Our results reveal a negative relationship between music sentiment beta and near-term returns, with multivariate regressions confirming its explanatory power beyond traditional risk factors. We also uncover nonlinear and time-varying effects, consistent with sentiment-driven mispricing and investor attention cycles. This study offers a global sentiment measure, contributing to the understanding of mood-driven dynamics in speculative markets and informing trading strategies, policy, and research.
Cross-section of cryptocurrency returns, Investor mood, Music sentiment, Return predictability, Spotify
Hadhri, Sinda
ec1eea8e-ba4a-4195-b6d7-7575124513e2
Younus, Mehak
59d45ecb-0c40-433b-b9b8-588b267fba3f
Naeem, Muhammad Abubakr
959d6cc4-53d1-47dc-8c3c-0354a08633d7
Yarovaya, Larisa
2bd189e8-3bad-48b0-9d09-5d96a4132889
22 July 2025
Hadhri, Sinda
ec1eea8e-ba4a-4195-b6d7-7575124513e2
Younus, Mehak
59d45ecb-0c40-433b-b9b8-588b267fba3f
Naeem, Muhammad Abubakr
959d6cc4-53d1-47dc-8c3c-0354a08633d7
Yarovaya, Larisa
2bd189e8-3bad-48b0-9d09-5d96a4132889
Hadhri, Sinda, Younus, Mehak, Naeem, Muhammad Abubakr and Yarovaya, Larisa
(2025)
Listening to the market: music sentiment and cryptocurrency returns.
Journal of International Money and Finance, 157, [103394].
(doi:10.1016/j.jimonfin.2025.103394).
Abstract
This paper investigates how investor sentiment, captured through a novel Spotify-based mood metric, influences the cross-sectional pricing of cryptocurrencies. Drawing on behavioral finance and psychological theories, we hypothesize that emotional states reflected in musical choices influence cryptocurrency returns. Using weekly data from 2,551 cryptocurrencies over five years, we find that sensitivity to music sentiment significantly predicts future returns. Our results reveal a negative relationship between music sentiment beta and near-term returns, with multivariate regressions confirming its explanatory power beyond traditional risk factors. We also uncover nonlinear and time-varying effects, consistent with sentiment-driven mispricing and investor attention cycles. This study offers a global sentiment measure, contributing to the understanding of mood-driven dynamics in speculative markets and informing trading strategies, policy, and research.
Text
1-s2.0-S0261560625001299-main
- Version of Record
More information
e-pub ahead of print date: 18 July 2025
Published date: 22 July 2025
Keywords:
Cross-section of cryptocurrency returns, Investor mood, Music sentiment, Return predictability, Spotify
Identifiers
Local EPrints ID: 507614
URI: http://eprints.soton.ac.uk/id/eprint/507614
ISSN: 0261-5606
PURE UUID: 9e766322-980d-4268-bce8-e1c80dc0c1d6
Catalogue record
Date deposited: 15 Dec 2025 17:45
Last modified: 16 Dec 2025 02:56
Export record
Altmetrics
Contributors
Author:
Sinda Hadhri
Author:
Mehak Younus
Author:
Muhammad Abubakr Naeem
Download statistics
Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.
View more statistics
