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Lookup NU author(s): Samah El Hajjar, Martin Enilov, Professor Bartosz GebkaORCiD
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This paper examines investors’ herding and overconfidence in cryptocurrency markets, with particular attention to their segmented nature with respect to capitalisation, market conditions, and external factors. Using a large sample of 1,008 cryptocurrencies, we find no unconditional herding. However, herding emerges in larger cryptocurrencies during periods of high volatility and market downturns. In contrast, overconfidence affects smaller cryptocurrencies during market upturns and high-liquidity periods. External markets, such as stocks, options, and commodities, primarily drive overconfidence in smaller cryptocurrencies. The uncertainty shock following the outbreak of the Russia-Ukraine war in 2022 eliminates herding in larger cryptocurrencies and induces overconfidence in trading smaller cryptocurrencies, while removing the influence of external markets on trading in small cryptocurrencies. Compared with continuous measures of uncertainty, the war outbreak represents a distinct shock with unique behavioural effects. These findings support more granular, asset-size-specific regulatory responses, particularly during geopolitical upheavals. Incorporating event-driven behavioural dynamics into monitoring frameworks may strengthen early warning systems and mitigate systemic vulnerabilities in digital asset markets.
Author(s): El Hajjar S, Enilov M, Gebka B
Publication type: Article
Publication status: In Press
Journal: Journal of International Financial Markets, Institutions & Money
Year: 2026
Acceptance date: 14/07/2026
ISSN (print): 1042-4431
ISSN (electronic): 1873-0612
Publisher: Elsevier BV
