Is Dogecoin a Viable Investment? Insights from Network and Bubble Effects

10/18/2022

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by   Ruoxin Xiao, et al.

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We find that three factors: Dogecoin network externalities, momentum, and tweet sentiment that capture the time-series expected Dogecoin returns. Dogecoin returns are exposed to Dogecoin network factors. We construct the network factors to capture the user adoption of Dogecoin. Moreover, there is a strong time-series momentum effect, and proxies for investor attention strongly forecast future Dogecoin returns. Lastly, we examine potential underlying mechanisms of the Dogecoin price bubble.