Examination of the Divergence in Alternate Trading Pairs
Open Access
- Author:
- O'Donnell, Shane
- Area of Honors:
- Finance
- Degree:
- Bachelor of Science
- Document Type:
- Thesis
- Thesis Supervisors:
- Brian Spangler Davis, Thesis Supervisor
Terrence Michael Obrien, Thesis Honors Advisor - Keywords:
- Bitcoin
Alt Pairs
Bitcoin Dominance
Finance
Markets
Quantitative Analysis - Abstract:
- When it comes to cryptocurrency, there are many varying opinions on every aspect of this brand-new asset. Within the context of this research, the disparities in price movements are the aspect in question, and this is the part of cryptocurrency that all stakeholders know the least about. There are some that say it is a hedge to different markets, and there are others that claim that they can use chartist methodology to find technical patterns. Whether these methods are true or false, they have something in common: they are based on standard market fluctuations that have been seen in equity and debt markets. Clearly, from what the world has seen, crypto markets are anything but traditional, but that is not to say that somewhere down the line this market will not converge to some fundamental standard. To explore the price movements of cryptocurrencies, I decided to analyze functions that are related only to the cryptocurrency market. More specifically, I chose to analyze convergence and divergence of correlation to Bitcoin, high volume trading pairs, and the market as a complete bucket to see if there are any potential opportunities that can be exploited for profit given current technological capabilities.