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Binance study reveals rate-correlations of the Altcoins with Bitcoin – Coin Hero

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Binance study reveals rate-correlations of the Altcoins with Bitcoin

Home News Binance study reveals rate-correlations of the Altcoins with Bitcoin

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Marcus Misiak –
30.04.2019

Binance Research, the correlations between the price movements of the 30 most important crypto-currencies by market capitalization investigated, and found, that there is always a big connection between the price developments of Bitcoin and all other Altcoins. The lowest correlations are Dogecoin, Tezos and XRP.

The report, entitled “Categorizing crypto assets: A Return-Driven Cluster Analysis”, focuses on the connection between crypto-currencies in terms of price. Binance Research analyzed for this purpose, the crypto-course-correlations of 31. March 2018 and 31. March 2019 and the so-called cluster analysis, which helps to group objects or classify used for this purpose. The report notes that the price correlations between the “major” Cryptocurrencies is extremely high, which means that most of the crypto currencies in the same step move and either fall together or rise.

In spite of the high correlations between most of the crypto-Assets, the report finds, with some exceptions, and notes that Dogecoin, Tezos and XRP “have the lowest correlations with other digital Assets in the period of one year”. Specifically to XRP, the study writes:

Based on the weekly returns of a large crypto on currencies, such as Bitcoin and Ethereum are the highest correlations, but a Ripple shows a lower correlation than in our previous report, and is an exception as the best Diversifikator digital Assets, with a market capitalization of about 3 billion US dollars.

Here is a look at all the correlations between the 30 most important crypto-Assets. The higher the correlation value, the stronger the correlation.
Source: https://info.binance.com/en/research/marketresearch/cluster.html

According to the results of the study Bitcoin Forks (Bitcoin, Gold, and Bitcoin to Cash), Ethereum Classic and Litecoin to form a Cluster. Another Cluster of Coins with the so-called “Binance effect”, Kryptos as Tezos and Dogecoin, two not in Binance listed crypto-currencies, which in each case form a child cluster.

In addition, there are geographical effects, such as a division between American and Asian Kryptos. So, for example, is found in the study that Qtum (QTUM), Cardano (ADA), NEO and OmiseGo (OMG) all have their headquarters in Asia “and most of their coins holders in this Region are located”. In contrast, XRP, BAT, and Dogecoin (DOGE) Teams and investors in America.

There is also a so-called “Coinbase Listing effect” in which some of Kryptos, one of which, it was reported that they were listed by Coinbase or examined, were grouped into similar clusters. So Coinbase has been listed in the course of the untersucten period, for example, XRP, Basic Attention Token (BAT) and Zcoin (ZEC), located in a common sub-group, which conveys the idea that these Coins could have similar Trends in the same market conditions.

In addition, Binance notes that some Privancy Coins, such as Dash and Monero also form a Cluster. In addition, Ether and Bitcoin show an extremely high correlation (0,872) between each other.

In addition, the research shows a strong correlation between XRP and Stellar Lumen, which interprets them as following:

While Stellar was originally based on the Ripple Protocol, was revised to be a Code quickly. Today, Stellar and Ripple are not based Code on the same common core. However, both of these digital Assets have even more similarities, since they both contribute to shape the global money transfer industry.

The full report can be found here.

Featured Image: Maquette.pro | Shutterstock

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