The analysis of encryption currency price correlation

The analysis of encryption currency price correlation

Whether there is a correlation between the bitcoin and other encryption encryption currency and asset price movements?

According to the analysis of the recent CoinDesk CryptoCompare data in February 2017 showed that the answer to this question will vary according to the categories of assets and different time periods.

In some cases, the answer is relatively simple. The currency has repeatedly entered several encryption encryption currency synchronized with each other development period.

For example, alternative protocols assets in the United States Securities and Exchange Commission (SEC) in March 10th to bitcoin ETF application after the sharp rise, and before a month it has just experienced a massive loss.

However, in other cases, the loss of bitcoin is to replace the encryption benefits of assets.

Analysts believe that one of the key factors affecting such prices is a major event in the field of encryption currency, such as distributed TheDAO or SEC rejects ETF rise and fall.

According to the CoinDesk bitcoin price index (BPI), before these events, bitcoin prices exceeded $1300, a record high. After making a final decision, bitcoin prices plummeted nearly 30%, and other digital currency rebound, some currency rising to a record high.

For example, according to CoinMarketCap, after SEC refused to fund for a week or so time, currency prices soared 200% over ethernet. Also, since the final decision after the introduction of Monroe (monero) currency prices rose more than 100%, while etherclassic also obtained significant gains.

But in the longer term how to compare? We review our results:

BTC and LTC: Like attracts like.

The relationship between the price of bitcoin and other digital currency the most objective method is to study the available data. The use of these information, market observers can better understand the relationship between what is.

For some currency composition, research quarterly data to help convey a strong sense relationship between two digital assets.

BTC/LTC (Wright currency) is a good example, because of the price data to the fourth quarter of 2013 showed 6 quarter Association of more than 0.7, more than 3 quarters of 0.8.

This is also a strong positive relationship between perfectly logical and reasonable, because Wright coins to some extent is a bitcoin “branch”, using the same technology and design.

But it is important to remember that there is always such a close relationship and Wright currency bitcoin prices are not, their relationship often appear rupture. ARKInvest ChrisBurniske pointed out that, in the SEC of the proposed WinklevossETF application before a decision is made of two kinds of digital currency respectively showed two opposite trends.

Bitcoin and XRP: be quite different

The relationship between relatively clear of another currency is BTC/XRP, the correlation of each quarter in 2015 and 2016 will remain below 0.2.

In all of the available price data for the mean value, correlation of this currency portfolio fell to 0.02.

JacobEliosoff encryption currency fund manager points out that the nature of the two currencies are quite different, which may help to explain the relationship between the price of the phenomenon is weak. And Wright currency bitcoin and XRP have different value propositions, and the audience are also different.

The different views of XRP marketing director MiguelVias Ripple of BTC and XRP of the proposed price relationship.

He said: “I think the market will XRP as a very stable digital assets, so if people want to withdraw from other assets, then XRP will be safe parked funds. If you want to exit the BTC, but do not want to have to switch to fiat money, so he is likely to be of value to XRP.”

Bitcoin and ETH: Change

For other digital currency, need to further understand the situation.

Although BTC/ETH (Ethernet currency) quarterly price data showed some modest correlation as high as 0.57, but the average value of seven days to carefully study the more clearly understand the situation.

Observe through the shorter period of time in some scenes, the correlation has reached 0.98. In August 1, 2016 to 7 days, seven days, the price is still higher than 0.90 BTC/ETH.

However, sometimes the correlations between these digital currency will fall sharply in August 2015 and October, during the seven days less than 0.04.

ETC, XMR: complex

Etherclassic is another and bitcoin have different relations of encryption currency. According to CryptoCompare data show that as of July 2016, the relationship between the first to 0.004, once again rose to as high as 0.96.

At the beginning of this year, the BTC/ETC on currency shows is particularly close relationship, in January seven a few days more than 0.90. However, their relationship repeatedly declined to very low levels, has dropped to below 0.1, and reached 0.004 in January 2017.

BTC/XMR on the development of the plot and currency BTC/ETH and BTC/ETC is very similar to the 7 day of the price correlation has been close to zero, but repeated more than 0.9.

At the beginning of this year, the 7 days were particularly strong, in January rose to 0.94. In contrast, the currency in 2016 February they encounter difficulties, the average value of 5 consecutive 7 day period of less than 0.2.

These two kinds of digital currency situation is different to a great extent. Although bitcoin is the first expansion of encryption currency, but Monroe coins (Monero) pay more attention to ensure the privacy of its users. Although bitcoin is the first to provide user privacy in the transaction, but the anonymous nature also makes it easier to identify the user.

But on the other side, Monroe coins through the ring signature and stealth address provides the user anonymous function is more effective.

Therefore, this kind of digital currency used in the dark in the net more widely.


The relationship between the price of digital currency is studied with the highly dynamic. Sometimes they coordinated development, and other times they will develop to two opposite direction. In some cases, their relationship is very low.

In some cases, the market development trend, there will be many encryption currency to rise or fall in a specific period. In the other period, may show minimal or no correlation between the price of digital currency.

However, with the development of the field of encryption currency increasingly mature, constitute a personal digital assets in the market to create individual niche market has made great progress, this development may lead to price factors change over time.

If these numbers in the currency traders eyes can successfully distinguish, then their relationship further decreased.

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