Journal
INTERNATIONAL REVIEW OF ECONOMICS & FINANCE
Volume 89, Issue -, Pages 863-912Publisher
ELSEVIER
DOI: 10.1016/j.iref.2023.10.036
Keywords
Cryptocurrency; Sustainability; Correlation; Co-movement; Network analysis
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This study conducts a formal analysis of the price creation mechanisms of Proof-of-Work (PoW) and non-PoW crypto assets, revealing that the long-term market trend aligns with the rising production cost of Bitcoin supply. Enabling the utilization of computational power to solve real-world problems, similar to data centers, would contribute to the sustainability of the crypto-asset market. Moreover, Proof-of-Stake crypto assets could serve as a practical tool for managing collaboration between startups and venture capitalists. The second part of the analysis introduces a co-movement measure, which may be more efficient than correlation metrics for analyzing the similarity between financial time series of returns.
This study conducts a formal analysis of the price creation mechanisms of Proof-of-Work (PoW) and non-PoW crypto assets revealing that the long-term market trend aligns with the rising production cost of Bitcoin supply. Enabling the utilization of computational power for solving real-world problems, similar to data centers, would facilitate the sustainability of the crypto-asset market. On the other hand, Proof-of-Stake crypto assets may serve as a practical tool for managing the collaboration between startups and venture capitalists. The second part of the analysis pro-poses a co-movement measure, which might be more efficient than correlation metrics for analyzing the similarity between financial time series of returns.
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