Abstract
This paper examines the spillover effect between Bitcoin and Meme stocks, the two types of assets heavily traded by retail investors. A unidirectional wealth transfer phenomenon from Meme stocks to Bitcoin is identified. Moreover, both past own volatility and volatility from Bitcoin contribute to Meme stocks’ current volatility. “Bad” news on the two assets affects not only themselves but also spillovers to each other. Our findings demonstrate the great risk of investment in Meme stocks and call for comprehensive protection for retail investors amid their growing active involvement in financial markets. JEL Classifications: C22, C5, G11
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