Crypto-Currency and the Problem of Intermediation

Harwick, Cameron

doi:10.2139/ssrn.2523771

Cited by 49 publications

(45 citation statements)

References 11 publications

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“…In this case, the causal link between active users and market cap is assumed. 7 An ANOVA/F-test comparing the two models gives a p-value of less than 10 −16 . Further, the calibrated value of the slope, β = 1.69, with standard error 0.0076, is clearly far from Metcalfe's value 2.…”

Section: Fundamental Value Of Bitcoin: Active Users and A Generalized Mmentioning

confidence: 99%

Are Bitcoin Bubbles Predictable? Combining a Generalized Metcalfe's Law and the LPPLS Model

et al. 2018

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We develop a strong diagnostic for bubbles and crashes in bitcoin, by analyzing the coincidence (and its absence) of fundamental and technical indicators. Using a generalized Metcalfe's law based on network properties, a fundamental value is quantified and shown to be heavily exceeded, on at least four occasions, by bubbles that grow and burst. In these bubbles, we detect a universal super-exponential unsustainable growth. We model this universal pattern with the Log-Periodic Power Law Singularity (LPPLS) model, which parsimoniously captures diverse positive feedback phenomena, such as herding and imitation. The LPPLS model is shown to provide an ex-ante warning of market instabilities, quantifying a high crash hazard and probabilistic bracket of the crash time consistent with the actual corrections; although, as always, the precise time and trigger (which straw breaks the camel's back) being exogenous and unpredictable. Looking forward, our analysis identifies a substantial but not unprecedented overvaluation in the price of bitcoin, suggesting many months of volatile sideways bitcoin prices ahead (from the time of writing, March 2018).

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Section: Fundamental Value Of Bitcoin: Active Users and A Generalized Mmentioning

confidence: 99%

Are Bitcoin Bubbles Predictable? Combining a Generalized Metcalfe's Law and the LPPLS Model

et al. 2018

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“…Unconventional sources of risk also exist for the cryptocurrency market. Some researchers question the underlying foundation and source of value of cryptocurrencies [2][3][4]. The cryptocurrency market is also being pressured for adequate disclosure by the City of New York, targeted by the SEC, and more recently accused of market manipulation.…”

Section: The Cryptocurrency Phenomenon and Unconventional Sources Of mentioning

confidence: 99%

Cryptocurrency Returns

Cudd¹,

Ritterbush²,

Marcelo³

et al. 2019

Blockchain and Cryptocurrencies

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One of the most significant innovations in the world of finance has been the creation and evolvement of cryptocurrencies. These digital means of exchange have been the focus of extensive news coverage, especially the Bitcoin, with a primary focus on the tremendous potential return and the high level of accompanying risk. In this chapter, we examine the risk-return pattern for an array of cryptocurrencies, contrasting the pattern with those of conventional currency and equity investments. We find the measures of cryptocurrency returns and risk to be a very high multiple of those of conventional investments, and the pattern is determined to be robust relative to the time frame. Consequently, cryptocurrencies are determined to provide an alternative to investors that involves tremendously high risk and return.

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“…Crypto currency systems generally claim to provide anonymous, decentralized processing of transactions (Sufian Hameed, 2016). In a political economy sense too, it may be valuable to have a cryptocurrency with a stable purchasing power to allay fears of adoption, even if the currency would nevertheless not sustain widespread growth until the regulations preventing intermediation are relaxed (Harwick, 2016).…”

Section: Literature Reviewmentioning

confidence: 99%

Cryptocurrencies: The Revolution in the World Finance

Joshi¹,

Khatiwada²,

Giri³

2018

NCC Jnl

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The cryptocurrency is thought to be the next internet revolution, where transactions are done utilizing peer-to-peer network creating a blockchain of the participants involved. Therefore, it is in totality creating a new virtual world, which might change the course of the foreseeable future finance. The reaction to the block chain and cryptocurrency is synonymous to the reaction to the internet when for the first time it emerged. While it is widely accepted for transactions in some countries; for instance in Nepal, it is illegal.Where the basic knowledge about the cryptocurrency is scarce in terms of Nepal, this article attempt to connote the grass root construct on cryptography, cryptocurrency and its practices across the globe to its readers.

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Crypto-Currency and the Problem of Intermediation

Cited by 49 publications

References 11 publications

Are Bitcoin Bubbles Predictable? Combining a Generalized Metcalfe's Law and the LPPLS Model

Are Bitcoin Bubbles Predictable? Combining a Generalized Metcalfe's Law and the LPPLS Model

Cryptocurrency Returns

Cryptocurrencies: The Revolution in the World Finance

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