Sentiments in the cryptocurrency market: an in-depth analysis of influential factors applying ISM-MICMAC and AHP

Abstract

Purpose: Cryptocurrency, an emerging asset class, is a virtual form of currency that uses cryptography for security and operates on decentralised networks based on blockchain technology. It offers both challenges and opportunities for investors, particularly in terms of diversification, risk management and potential returns. Considering this, the present study attempts to investigate the sentimental factors influencing cryptocurrency while unravelling the intricate interplay among these factors. Design/methodology/approach: To achieve this, interpretive structure modelling (ISM) identifies the hierarchical model of critical sentimental factors, while Cross-Impact Matrix Multiplication Applied to Classification (MICMAC) explores their dependency and driving power. Analytic hierarchy process (AHP) is adopted to rank the drivers. Findings: Findings reveal that the pandemic, war, religiosity and economic uncertainty are top-level factors dominantly shaping cryptocurrency trends. Simultaneously, Google Search Trends and Herding emerge as the most dependent factors, influenced by sentiments that emerged from other factors. Practical implications: The study unpacks implications, acknowledges limitations and proposes avenues for future research. Originality/value: By exploring the interactive interrelationships among identified sentimental factors through ISM-MICMAC analysis and ranking via the AHP, this paper will have a great influence while contributing towards this evolving field.