The Market for Cryptocurrency: How Will It Evolve?

Allen, B L; Bryant, Sarah

doi:10.1142/s2194565919500192

Cited by 10 publications

(4 citation statements)

References 2 publications

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“…Just like the internet was a milestone in the growth of communication, cryptocurrency could be the subsequent move in the evolution of finance in this growing electronic era. According to Allen and Bryant (2019) , cryptocurrency is the obvious next step in the evolution of currency in a culture that is becoming more electronic, digital, and virtual every day. Although cryptocurrency and its innate technology will become more accessible and useful in the future, it is currently a highly divisive issue ( Allen and Bryant, 2019 ).…”

Section: Evolution Of Cryptocurrenciesmentioning

confidence: 99%

“…According to Allen and Bryant (2019) , cryptocurrency is the obvious next step in the evolution of currency in a culture that is becoming more electronic, digital, and virtual every day. Although cryptocurrency and its innate technology will become more accessible and useful in the future, it is currently a highly divisive issue ( Allen and Bryant, 2019 ). Although this part is not directly related to our work, it may provide readers with useful information about the history of cryptocurrency.…”

Section: Evolution Of Cryptocurrenciesmentioning

confidence: 99%

See 1 more Smart Citation

Cryptocurrency and stock market: bibliometric and content analysis

Jeris

Chowdhury²,

Akter³

et al. 2022

Heliyon

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Section: Evolution Of Cryptocurrenciesmentioning

confidence: 99%

Section: Evolution Of Cryptocurrenciesmentioning

confidence: 99%

Cryptocurrency and stock market: bibliometric and content analysis

Jeris

Chowdhury²,

Akter³

et al. 2022

Heliyon

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“…According to Coin Telegraph, despite numerous statements by the Tether organization, there is serious doubt by members of the community that everything is legitimate [ 40 ]. Allen and Bryant [ 41 ] concluded that although the idea about introducing Tether is great in theory, and something like Tether may be the first step in widespread cryptocurrency adoption, it may need to come from an organization that is more trusted for innovation in space. Although extremely unlikely, if Tether were to become officially backed by the U.S. government, the issue some may have with trust could be resolved.…”

Section: Literature Reviewmentioning

confidence: 99%

Dissecting Tether’s Nonlinear Dynamics during Covid-19

Maiti

Grubišić²,

Vuković

2020

Journal of Open Innovation: Technology, Market, and Complexity

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The present study is on the five cryptocurrency daily mean return time series linearity dynamics during the Covid-19 period. These cryptocurrencies were chosen based on their influence on the market, primarily driven by its market capitalisation. Tether is included as the most important stable coin on the market, nominally pegged to the U.S. dollar (USD). The reason to investigate it is that there are some inconsistencies in its behaviour as opposed to the other four cryptocurrencies. This study found that the behaviour of Tether cryptocurrency daily average return time series pattern is highly nonlinear and chaotic in nature, whereas the other four cryptocurrencies (namely Bitcoin, Ethereum, XRP and Bitcoin Cash) daily average return time series were found to be linear in nature. To further study Tether’s nonlinear time series rich dynamics, this study deployed one category of the regime switching models popularly known as the threshold regressions. The study estimates fairly suggest that both the threshold autoregression (TAR) and smooth transition autoregressive (STAR) models with lag 1 are adequate to capture the rich nonlinear and chaotic dynamics of Tether’s daily average return time series.

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“…Based on behavioral finance, if the investor sentiments caused by speculative needs and subjective performance influence the investment demand, asset prices will diverge from their value (Ji et al , 2020), which is also confirmed by empirical research (Ba and Zhu, 2016; Wei-qi and Xin-xin, 2014). Blockchain is developing so rapidly (Ji et al , 2020), so as the cryptocurrencies (Allen and Bryant, 2019) can influence the general sentiment toward firms that use this technology (Ji et al , 2020) and cryptocurrencies. In addition, both these technology firms and cryptocurrencies are backed by blockchains.…”

Section: Introductionmentioning

confidence: 99%

Emerging digital economy companies and leading cryptocurrencies: insights from blockchain-based technology companies

Asl

Rashidi

Abad

2021

JEIM

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PurposeThe purpose of this study is to investigate the correlation between the price return of leading cryptocurrencies, including Bitcoin, Ethereum, Ripple, Litecoin, Monero, Stellar, Peercoin and Dash, and stock return of technology companies' indices that mainly operate on the blockchain platform and provide financial services, including alternative finance, democratized banking, future payments and digital communities.Design/methodology/approachThis study employs a Bayesian asymmetric dynamic conditional correlation multivariate Generalized Autoregressive Conditional Heteroskedasticity (GARCH) (BADCC-MGARCH) model with skewness and heavy tails on daily sample ranging from August 11, 2015, to February 10, 2020, to investigate the dynamic correlation between price return of several cryptocurrencies and stock return of the technology companies' indices that mainly operate on the blockchain platform. Data are collected from multiple sources. For parameter estimation and model comparison, the Markov chain Monte Carlo (MCMC) algorithm is employed. Besides, based on the expected Akaike information criterion (EAIC), Bayesian information criterion (BIC), deviance information criterion (DIC) and weighted Deviance Information Criterion (wDIC), the skewed-multivariate Generalized Error Distribution (mvGED) is selected as an optimal distribution for errors. Finally, some other tests are carried out to check the robustness of the results.FindingsThe study results indicate that blockchain-based technology companies' indices' return and price return of cryptocurrencies are positively correlated for most of the sampling period. Besides, the return price of newly invented and more advanced cryptocurrencies with unique characteristics, including Monero, Ripple, Dash, Stellar and Peercoin, positively correlates with the return of stock indices of blockchain-based technology companies for more than 93% of sampling days. The results are also robust to various sensitivity analyses.Research limitations/implicationsThe positive correlation between the price return of cryptocurrencies and the return of stock indices of blockchain-based technology companies can be due to the investors' sentiments toward blockchain technology as both cryptocurrencies and these companies are based on blockchain technology. It could also be due to the applicability of cryptocurrencies for these companies, as the price return of more advanced and capable cryptocurrencies with unique features has a positive correlation with the return of stock indices of blockchain-based technology companies for more days compared to the other cryptocurrencies, like Bitcoin, Litecoin and Ethereum, that may be regarded more as speculative assets.Practical implicationsThe study results may show the positive role of cryptocurrencies in improving and developing technology companies that mainly operate on the blockchain platform and provide financial services and vice versa, suggesting that managers and regulators should pay more attention to the usefulness of cryptocurrencies and blockchains. This study also has important risk management and diversification implications for investors and companies investing in cryptocurrencies and these companies' stock. Besides, blockchain-based technology companies can add cryptocurrencies to their portfolio as hedgers or diversifiers based on their strategy.Originality/valueThis is the first study analyzing the connection between leading cryptocurrencies and technology companies that mainly operate on the blockchain platform and provide financial services by employing the Bayesian ssymmetric DCC-MGARCH model. The results also have important implications for investors, companies, regulators and researchers for future studies.

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The Market for Cryptocurrency: How Will It Evolve?

Cited by 10 publications

References 2 publications

Cryptocurrency and stock market: bibliometric and content analysis

Cryptocurrency and stock market: bibliometric and content analysis

Dissecting Tether’s Nonlinear Dynamics during Covid-19

Emerging digital economy companies and leading cryptocurrencies: insights from blockchain-based technology companies

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