This academic paper analyses the relationship between the market price of selected Cryptocurrencies, its traded volume and circulating supply. Various quantitative methods of statistics are applied in order to evaluate any relation between all three parameters.
In rapidly changing times of today, the financial market is being shaped in all its sectors driven by existing megatrends such as Digitization. Technological improvements and virtual connectivity are yet the latest advancements which push forward the disruption of the financial sector. One recent phenomenon are Cryptocurrencies, virtual tokens that are stored and transferred digitally on a Distributed Ledger (DLT). A DLT-network represents a peer-to-peer environment which enables individuals to operate financial transactions that are operated and recorded in a decentralized and encrypted manner. Every transfer is then stored in the virtual Blockchain. Unlike established mechanisms in world economy, Cryptocurrencies aim to establish a new environment which performs independently, securely distributed and detached from regulations by authorities or governments. In contrast to physical currencies, Cryptocurrencies are not backed by a Central Bank or have an underlying asset or security that builds the fundament for the virtual currency. It is to say that Cryptocurrencies can yet not be seen as a universal medium of payment since they fundamentally fail to meet three requirements of the Federal Reserve Banks in order be an accepted currency. (cf. HSBC, 2018)
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Discussion of Relevant Literature and Economic Theory
- Data Description
- Empirical Results
- Conclusion
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper aims to investigate the relationship between cryptocurrency market price, traded volume, and circulating supply. Utilizing a Log-Log Regression Model, the study analyzes data from the 100 largest cryptocurrencies to determine the impact of these factors on market price.
- The influence of traded volume on cryptocurrency market price
- The impact of circulating supply on cryptocurrency market price
- The application of a Log-Log Regression Model in analyzing cryptocurrency market dynamics
- The implications of the findings for understanding cryptocurrency market behavior
- The potential for utilizing this analysis in forecasting future price movements
Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter provides an overview of the rise of cryptocurrencies and their unique characteristics within the financial landscape. It highlights the challenges in valuing and regulating cryptocurrencies, particularly in comparison to traditional currencies. The chapter also discusses the potential factors influencing cryptocurrency price fluctuations, including traded volume and circulating supply.
- Discussion of Relevant Literature and Economic Theory: This section explores existing research and economic theories relevant to understanding cryptocurrency markets. It examines studies that have investigated the relationship between market price, traded volume, and circulating supply in traditional markets and analyzes their potential applicability to cryptocurrencies.
- Data Description: This chapter details the data used in the study, including the selection criteria for the 100 largest cryptocurrencies, the time period covered, and the specific variables analyzed. It also provides a detailed description of the Log-Log Regression Model employed to analyze the data.
Schlüsselwörter (Keywords)
Cryptocurrency, market price, traded volume, circulating supply, Log-Log Regression, Distributed Ledger Technology (DLT), Blockchain, financial markets, volatility, price prediction, data analysis.
- Quote paper
- Jaby Felix Coronel (Author), 2019, Cryptocurrencies. Relationship between Market Price, Traded Volume and Circulating Supply, Munich, GRIN Verlag, https://www.grin.com/document/948802
