Further Unravelling Cryptocurrency Behaviour
Further Unravelling Cryptocurrency Behaviour

Author(s): Cristina Palma, Rui Dias, Rosa Galvão, Paulo Alexandre, Sidalina Gonçalves
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Cryptocurrencies; Efficiency; Long memories; DFA; Arbitrage
Summary/Abstract: The primary purpose of this study is to compare the levels of efficiency between the Islamic cryptocurrency (HelloGold), the ecological cryptocurrencies Cardano (ADA) and Stellar (XLM) and the traditional digital currencies Bitcoin (BTC) and Ethereum (ETH) over the period from 24 February 2022 to 28 January 2024. Analysing the DFA exponents reveals different types of memory in the digital currencies time series. The Islamic digital currency HelloGold (HGT) exhibits short-term memory, suggesting profit opportunities based on recent trends. In contrast, the green cryptocurrency Cardano (ADA) shows long-term memory, indicating the influence of long-term events and trends on prices. The digital currency Stellar (XLM) does not show a clear short-term or long-term memory trend, making it difficult to predict future movements. Meanwhile, Bitcoin (BTC) and Ethereum (ETH) exhibit long-term memory, suggesting that their prices are affected by long-term trends. These results have important implications for investors and traders when adjusting their trading strategies according to the behaviour observed in cryptocurrency prices.

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