Market correlation: How different the crypt interact
In recent years, cryptocurrency has recorded rapid growth, many new development and existing coins, achieving traction. As with any class of assets, however, there are different cryptocurrencies with different characteristics that can influence the correlation of the market between them. In this article we will deepen how different cryptocurrencies interact with each other and emphasize important correlations, possible differences and effects.
General presentation of the cryptocurrency market
The cryptocurrency market is extremely connected, with various assets influence the prices and services of the others. This networking is due to the following reasons:
1 These taxes can have a significant impact on the trading volume and market correlation with existing cryptocurrencies.
- Security risks : Cryptocurrencies with high security risks can experience higher volatility due to the increased hacking probability or other security violations.
- Regulatory environment : Changes in regulatory environments such as government guidelines or international sanctions can influence cryptocurrency prices and market correlation.
Correlation between different cryptes
The correlations between different cryptocurrencies vary depending on their characteristics, usage cases and the adoption levels. Here are some examples of how different cryptocurrencies interact with each other:
* Bitcoin (BTC) vs. Ethereum (ETH) : BTC tends to overcome the ETH due to the stronger recognition of the brand, the larger security standards and the more established application.
* Litecoin (LTC) vs. Bitcoin Cash (BCH) : LTC was a better historian than BCH, probably due to his faster transaction speed and lower taxes compared to BCH.
* Monero (XMR) vs. Zcash (TEC)
: The private transaction method of Monero was more popular with users, which led to higher prices compared to ZCash.
* Kettenlink (link) vs. Uniswap (uni) : Link is reached due to its strong correlation with these two cryptocurrencies at the price of BTC and ETH.
Key correlations
Here are some important correlations between different cryptocurrencies:
* Bitcoin vs. Ethereum : severely correlated, Bitcoin exceeds ETH with regard to market capitalization.
* Litecoin vs. Bitcoin Cash : moderately correlated, LTC is better off than BCH due to its faster transaction speed and lower taxes.
* Monero vs. Zcash
: badly correlated, with the private transaction method of Monero, which leads to higher prices compared to ZCash.
Differences in cryptocurrency
Different cryptocurrencies have different features that can influence the market correlation:
* Safety : Stronger security standards lead to better market performance and lower volatility.
* The case of use : Various applications such as mining or payment taxes influence the market capitalization of every cryptocurrency.
* Adoption level : Higher intake values lead to more liquidity on the market, which affects prices and correlations.
Diploma
The market correlation between different cryptocurrencies is a complex problem with various factors that influence their interactions. Understanding these correlations can help investors know the case when sailing on the cryptocurrency market. In view of the most important correlations, potential differences and effects for every cryptocurrency, investors can better prepare for the developing landscape of this wealth class.
Additional tips for investors
- Disorses your portfolio : spread investments in different cryptocurrencies to minimize the losses due to market fluctuations.
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