The research division of the Binance Cryptocurrency Exchange presented the results of the analysis of correlation of the largest assets in the market of cryptocurrencies for the first six months of 2019.
Analysts note that despite the rollback in the last days of the second quarter, the overall indicators of the cryptocurrency market in the first half of the year turned out to be extremely positive. The segment's total capitalisation increased by 139% in the last quarter, which is the third best performance in a single quarter since 2014. In dollar terms, crypto market capitalisation increased by approximately $199bn, yielding only to the bullish fourth quarter of 2017.
The overall level of correlation between the leading cryptocurrency assets remained rather high. At the same time, none of the analyzed pairs showed a negative correlation, which indicates the continuing strong influence of market trends on individual assets.
Analysts note that the level of correlation may be influenced, among other things, by the consensus mechanism used in the cryptocurrency. For example, Proof-of-Work cryptocurrencies on average correlated more with each other than with other assets using different algorithms.
Besides, cryptocurrencies with private characteristics, such as DASH and Monero, strongly correlated with each other. "If Litecoin introduces MimbleWimble in the future, it will be interesting to observe its correlation with these two assets," the authors of the study write.
XRP and Stellar showed an extremely high level of correlation. Analysts suggest that this may be due to their similar focus - the creators of both atkids are seeking to "change the global payment industry".
Bitcoin in the second quarter was less correlated with other assets in the market compared to the first three months of the current year. As mentioned above, the segment's total capitalisation increased by 139% in the second quarter, but excluding Bitcoin, it increased by only 71%. According to Binance Research, this feature can be explained by the desire of investors to invest in a time-tested asset, which is typical for the early stage of the bull market.
Tezos, Ontology and Tron were the leaders in the overall correlation with other assets, while the similar parameter Bitcoin SV fell more than the other cryptocurrencies. As an explanation for these dynamics, analysts name the delisting of BSV with Binance and Kraken.
Dogecoin also became less correlated with other assets, but often coincided with Litecoin. In addition, there was no increased correlation with the rest of the market and the assets, whose creators conducted initial public offering (IEO) on the platform of Binance Launchpad, including BitTorrent, Fetch.AI and Celer Network.
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