Bitcoin Global News (BGN)
August 09, 2018 -- ADVFN Crypto NewsWire -- On Monday, a Yale
economist and a PHD candidate in his department publicly announced
that they had found a way to predict price trends in what they call
the “major cryptocurrencies,” which appeared to actually refer to
Bitcoin alone.
Despite this, in the announcement,
it was clarified that the study was actually published based on a
seven year analysis of Bitcoin, Ripple, and Ethereum.
The researchers, Aleh Tsyvinski and
Yukun Liu, have claimed that their findings are significant, which
appears to be true, given the facts.
Cointelegraph reported that
the team’s major finding was that these three Cryptocurrencies
appear to have no real connection to the movement of the
traditional stock market.
Furthermore, the study also found
that the movement of these three Cryptocurrencies does not
correlate with the movement of traditional currencies, commodities
or other macroeconomic factors.
With all of this, their overarching
conclusion was that related to price movements, Cryptocurrencies
are only correlated to factors specific to their market.
You might be wondering at this
point: what do we mean by these market specific factors?
One example is what Tsyvinski and
Liu termed, “a strong time-series momentum effect,” which appears
to mean something like if Bitcoin’s price consistently increases in
the course of a week, then it should do the same in the next
week.
Related to this, the team found
that a significant, quick jump in Bitcoin’s price means a
significant jump in demand, which in turn means, more investments
in the market.
In connection with this, they said
that the same seems to happen with Ethereum and Ripple, but at a
smaller scale. Since this further connection has been proven in a
quantitative study, it just might silence a few critics of these
other networks, especially those who seem to consistently stand against Ripple’s
progress.
The same report by Cointelegraph on
the study mentioned one more market specific factors, which they
call “investor attention.” This boils down to the idea that the
price movement of these Cryptocurrencies is correlated with how
many posts appear on social media and how many searches are done on
Google, on Crypto related topics.
Given that this study apparently
used 354 industries in the USA, as well as 137 in
China to run its numbers, it can be
taken as reliably executed and therefore, presenting valid
findings.
As time goes on, it will be most
interesting to see how other researchers try to add to this,
especially with the difficulty of almost no correlation existing
between Crypto and traditional markets.
Because this is true, discovering
more quantitatively based market specific factors will be an
undertaking since researchers will have to do so without historical
information to compare the Crypto market to.
By: BGN Editorial Staff
News:
Cryptocurrency