One size does not fit all: external driver of the cryptocurrency world

Erzurumlu, Yaman O.; Oygur, Tunc; Kirik, Alper

doi:10.1108/sef-01-2020-0018

Cited by 7 publications

(3 citation statements)

References 53 publications

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“…Few studies pointed out rising dominance of bitcoin makes reset the support level of Altcoins [28] and observed progress in the price movement of Altcoins when the dominance of bitcoin is decreased [29] . The crypto market showed explosive behaviour among cryptocurrencies except for NEM coin, which supported the earlier literature [5,10,22,30,31] .…”

Section: Review Of Literaturesupporting

confidence: 89%

Followness of Altcoins in the Dominance of Bitcoin: A Phase Analysis

Kulal

2021

macro. manag. & public. polic.

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Due to the transparency, simplicity, and blockchain system, cryptocurrencies gained popularity in the modern world. This led to more use of cryptocurrencies for speculation and investment rather than a medium of exchange. It is crucial to analyse the nature of the crypto market before investing in such currencies. With this intention, the paper tried to know the extent of following (Followness) of altcoins to the bitcoin in the different dominance phases like High Dominance, Low Dominance, and Moderate Dominance. For this purpose, daily closing prices of the Bitcoin and five major altcoins (Ethereum, Litecoin, Namecoin, Doge, and Ripple) are collected for the last five years and analyse the relationship between bitcoin and altcoins. Pearson's correlation coefficient test is used to know the direction of the relationship, and Vector Error Correction Model is used to see the extent of the relation. In general, the empirical result of the study showed cointegration between bitcoin and Altcoin. It also depicted that Altcoin showed a high level of followness in the moderate dominance phase and low followness in the low dominance phase. The study developed a price estimation equation to predict the price of altcoins depending upon the price of bitcoin and its dominance in the crypto market. This paper concludes that the dominance of Bitcoin also has a significant role in the price movement of altcoins.

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Section: Review Of Literaturesupporting

confidence: 89%

Followness of Altcoins in the Dominance of Bitcoin: A Phase Analysis

Kulal

2021

macro. manag. & public. polic.

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“…The presence of corporations in the cryptocurrency market was also not felt until mid-2020s when the various financial institution began investing in bitcoin by holding them on their balance sheets (Erzurumlu, Oygur & Kirik, 2020). A recent survey by the CoinDesk revealed that in 2020, the largest institutional holder of Bitcoins was the merchant bank Galaxy Digital Holdings in US which held 16,400 BTC which were worth $357 million.…”

Section: Introductionmentioning

confidence: 99%

Insurance Opportunities and Challenges in a Crypto Currency World

Kajwang¹

2022

IJTS

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Purpose: The study analysed the insurance opportunities and challenges in a cryptocurrency world. Materials and Methods: The research methodology used in this study consisted of a systematic literature review of previous studies from different scholars, that have discussed on insurance opportunities and challenges in the cryptocurrency world or research topic related to the study topic. This research method was preferred since it is quite reliable, cost-saving and time-saving as compared to primary research methods. This study relied more on online journals, articles and published work from libraries since they provide easy access to secondary information/data. Results: The results indicated that the reviewed studies had conceptual and contextual gaps. This is because most of them discussed on blockchain technology and smart contracts as the only components in the cryptocurrency market that insurance firms have tapped into. In addition, some of these studies have discussed on the opportunities and challenges in the real estate market and healthcare systems or a specific type of insurance firm rather than the bigger picture of the insurance industry. Unique contribution to the theory, practice and policy: The theories discussed in this study will be beneficial to the researchers and scholars since it gives a better understanding on the application of these theories to insurance and the cryptocurrency world. The researchers and scholars will also find this study relevant considering that studies on insurance opportunities and challenges in a cryptocurrency world are quite scarce. This study will provide a good literature base for their studies. Moreover, the identified research gaps in this study will act as a motivation to the different researchers and scholars to conduct more studies on related topics, thus bridging the research gaps on insurance opportunities and challenges in a cryptocurrency world. The study will provide a better understanding to the management of the insurance companies, on how they can invest on the various opportunities available in the cryptocurrency market. Further, the policymakers in the insurance industry will also benefit from the discussion on challenges that arise from adoption of blockchain technology and smart contract, as they implement various policies that promote growth of the insurance industry.

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“…The results indicate that six major cryptocurrencies do provide diversification benefits, as they show no signs of integration with equity and Forex markets. Each coin acts as an independent character, therefore indexes such as S&P500, NASDAQ, NIKKEI225 and Shanghai hold no influence on the price changes of cryptocurrencies (Erzurumlu et al , 2020). In general, cryptocurrencies share characteristics with traditional financial instruments but they function independently and uninfluenced by their trends.…”

Section: Introductionmentioning

confidence: 99%

Analysis of diversification benefits for cryptocurrency portfolios before and during the COVID-19 pandemic

Aliu

Bajra

Preniqi

2021

SEF

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Purpose This study aims to investigate the diversification benefits attached to the crypto portfolios when combined with stocks, Forex instruments and commodity assets. Design/methodology/approach Markowitz diversification techniques have been used to analyze the risk-return tradeoffs of the individual portfolios. Daily prices on cryptocurrencies and the selected asset classes, cover the period before and during the pandemic COVID-19. The portfolio risk of the portfolios was calculated by identical techniques and analyzed with equal criteria. Findings The results with 270 trails indicate that stocks on average reduce the portfolio risk of crypto portfolios by 36% followed by fiat currency with 30.9% and commodities by 20.8%. Average daily returns stand in line with the standard portfolio theories where riskier portfolios offer higher returns and the other way around. Originality/value The authors contribute to the current literature by investigating the portfolio risk attached to the crypto portfolios when stocks, commodities and Forex instruments were added separately. To this end, results inform not only retail investors but also portfolio managers on the asset classes that generate better optimization for crypto portfolios.

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One size does not fit all: external driver of the cryptocurrency world

Cited by 7 publications

References 53 publications

Followness of Altcoins in the Dominance of Bitcoin: A Phase Analysis

Followness of Altcoins in the Dominance of Bitcoin: A Phase Analysis

Insurance Opportunities and Challenges in a Crypto Currency World

Analysis of diversification benefits for cryptocurrency portfolios before and during the COVID-19 pandemic

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