Bitcoin return: Impacts from the introduction of new altcoins

【Author】 Thai Vu Hong Nguyen; Binh Thanh Nguyen; Thanh Cong Nguyen; Quang Quoc Nguyen

【Source】RESEARCH IN INTERNATIONAL BUSINESS AND FINANCE

【影响因子】6.143

【Abstract】The model predicting Bitcoin price formation remains a mystery to academia and investors. Newly invented cryptocurrencies (alternative coins-altcoins) with enhanced features may become close substitutes to Bitcoin in terms of risk diversification. Employing AutoregressiveDistributed- Lag (ARDL) estimations, we document the evidence that the introduction of a new altcoin tends to lower Bitcoin return by 0.7% which is substantial given that the average and median daily returns of Bitcoin are 0.63% and 0.27%, respectively. Our study suggests that the negative impact of an Initial Public Offering on existing stock prices can also be observed in the cryptocurrency market: altcoin introductions reduce Bitcoin return.

【Keywords】Bitcoin; Altcoins; Price formation

【发表时间】2019 APR

【收录时间】2022-01-02

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