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Evolutionary dynamics of the cryptocurrency market

The cryptocurrency market surpassed the barrier of $100 billion market capitalization in June 2017, after months of steady growth. Despite its increasing relevance in the financial world, a comprehensive analysis of the whole system is still lacking, as most studies have focused exclusively on the b...

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Autores principales: ElBahrawy, Abeer, Alessandretti, Laura, Kandler, Anne, Pastor-Satorras, Romualdo, Baronchelli, Andrea
Formato: Online Artículo Texto
Lenguaje:English
Publicado: The Royal Society Publishing 2017
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5717631/
https://www.ncbi.nlm.nih.gov/pubmed/29291057
http://dx.doi.org/10.1098/rsos.170623
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author ElBahrawy, Abeer
Alessandretti, Laura
Kandler, Anne
Pastor-Satorras, Romualdo
Baronchelli, Andrea
author_facet ElBahrawy, Abeer
Alessandretti, Laura
Kandler, Anne
Pastor-Satorras, Romualdo
Baronchelli, Andrea
author_sort ElBahrawy, Abeer
collection PubMed
description The cryptocurrency market surpassed the barrier of $100 billion market capitalization in June 2017, after months of steady growth. Despite its increasing relevance in the financial world, a comprehensive analysis of the whole system is still lacking, as most studies have focused exclusively on the behaviour of one (Bitcoin) or few cryptocurrencies. Here, we consider the history of the entire market and analyse the behaviour of 1469 cryptocurrencies introduced between April 2013 and May 2017. We reveal that, while new cryptocurrencies appear and disappear continuously and their market capitalization is increasing (super-)exponentially, several statistical properties of the market have been stable for years. These include the number of active cryptocurrencies, market share distribution and the turnover of cryptocurrencies. Adopting an ecological perspective, we show that the so-called neutral model of evolution is able to reproduce a number of key empirical observations, despite its simplicity and the assumption of no selective advantage of one cryptocurrency over another. Our results shed light on the properties of the cryptocurrency market and establish a first formal link between ecological modelling and the study of this growing system. We anticipate they will spark further research in this direction.
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spelling pubmed-57176312017-12-29 Evolutionary dynamics of the cryptocurrency market ElBahrawy, Abeer Alessandretti, Laura Kandler, Anne Pastor-Satorras, Romualdo Baronchelli, Andrea R Soc Open Sci Computer Science The cryptocurrency market surpassed the barrier of $100 billion market capitalization in June 2017, after months of steady growth. Despite its increasing relevance in the financial world, a comprehensive analysis of the whole system is still lacking, as most studies have focused exclusively on the behaviour of one (Bitcoin) or few cryptocurrencies. Here, we consider the history of the entire market and analyse the behaviour of 1469 cryptocurrencies introduced between April 2013 and May 2017. We reveal that, while new cryptocurrencies appear and disappear continuously and their market capitalization is increasing (super-)exponentially, several statistical properties of the market have been stable for years. These include the number of active cryptocurrencies, market share distribution and the turnover of cryptocurrencies. Adopting an ecological perspective, we show that the so-called neutral model of evolution is able to reproduce a number of key empirical observations, despite its simplicity and the assumption of no selective advantage of one cryptocurrency over another. Our results shed light on the properties of the cryptocurrency market and establish a first formal link between ecological modelling and the study of this growing system. We anticipate they will spark further research in this direction. The Royal Society Publishing 2017-11-15 /pmc/articles/PMC5717631/ /pubmed/29291057 http://dx.doi.org/10.1098/rsos.170623 Text en © 2017 The Authors. http://creativecommons.org/licenses/by/4.0/ Published by the Royal Society under the terms of the Creative Commons Attribution License http://creativecommons.org/licenses/by/4.0/, which permits unrestricted use, provided the original author and source are credited.
spellingShingle Computer Science
ElBahrawy, Abeer
Alessandretti, Laura
Kandler, Anne
Pastor-Satorras, Romualdo
Baronchelli, Andrea
Evolutionary dynamics of the cryptocurrency market
title Evolutionary dynamics of the cryptocurrency market
title_full Evolutionary dynamics of the cryptocurrency market
title_fullStr Evolutionary dynamics of the cryptocurrency market
title_full_unstemmed Evolutionary dynamics of the cryptocurrency market
title_short Evolutionary dynamics of the cryptocurrency market
title_sort evolutionary dynamics of the cryptocurrency market
topic Computer Science
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5717631/
https://www.ncbi.nlm.nih.gov/pubmed/29291057
http://dx.doi.org/10.1098/rsos.170623
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