Interdependences Between Cryptocurrencies: A Network Analysis from 2013 to 2018

Abstract

Through a data-driven analysis, namely network analysis, we investigate the relationships between all existing cryptocurrencies. Starting from the analysis of cryptocurrencies in 2013, we extend our study until July 2018 to study the interdependencies between 1636 cryptocurrencies. Our study shows that, although Bitcoin is the older and the most famous cryptocurrency, it does not appear as an influential asset on the virtual currency market. Our analysis also indicates a densification of the interconnections between virtual currencies, indicating that change of a single coin will likely influence many other coins. Interestingly, we also observe that the most influential cryptocurrencies for a year appear not to be influential the following year. Finally, cryptocurrencies tend to change their influence over time suggesting a short-term interdependence between them. JEL: G11, G12