Testing for Herding in Artificial Intelligence-Themed Cryptocurrencies Following the Launch of ChatGPT

Abstract

This article aims to investigate the presence of herding behavior in artificial intelligence (AI)–themed cryptocurrencies following the launch of ChatGPT. The authors analyze daily data from major AI-themed cryptocurrencies between November 2022 and February 2023. This study finds evidence of irrationality among investors in this market segment who tend to imitate others’ decisions regardless of their own beliefs during down events. The authors connect this finding to the herding theory in financial economics and highlight the implications for investors and policymakers. This article contributes to the literature on the impact of AI on financial markets and suggests the need for further research in this area. Finally, this study provides important policy implications, as it could help investors better understand the risks associated with this emerging asset class.