- Crypto Assets with Large Market Cap Showed Higher Positive Correlation with Each Other
- Ethereum is the Most Correlated Digital Currency in the Ecosystem
Ethereum News Today – Yesterday, Binance released a new episode of its podcast about correlations between digital currencies during the third quarter of this year. In the mini pod, Brian from Binance Trading talked about the analysis carried out by the research team of the trading platform. The price of Bitcoin (BTC) dropped by about 30 percent in the third quarter. However, altcoins with huge market caps also recorded huge losses, as they dropped by 38-60 percent.
Crypto Assets with Large Market Cap Showed Higher Positive Correlation with Each Other
According to the third-quarter report, the dominance of Bitcoin (BTC) surged steadily, and it temporarily tested 70 percent during the quarter. The trading dominance of Bitcoin (BTC) also seemed to be high, with more than 40 percent of trading activity on Binance using BTC against stablecoin pairs. This is a significant increase compared to the first half of the year when the trading dominance of Bitcoin was just 15-25 percent.
Ethereum (ETH) Price Today – ETH / USD
Binance was able to discover that digital currencies with large market caps showed higher positive correlation with each other than in the second quarter. The research further revealed that there was more substantial correlations between Proof of Work assets. Furthermore, privacy-oriented digital currencies such as Zcash (ZEC), Monero, and Dash (DASH), displayed higher correlation between each other than they did with other digital currencies.
Ethereum is the Most Correlated Digital Currency in the Ecosystem
In what Binance refer to as Binance Effect, the research team found out that digital currencies listed on the exchange displayed higher correlation between each other than digital currencies that are not listed on the platform. Another interesting finding was that the second-largest digital currency by market cap – Ethereum – had become the most correlated digital currency in the ecosystem. According to the researchers, this could potentially lead Ethereum to becoming the principal standard for correlation in the future.
The trading dominance of Bitcoin increased faster than the dominance of its market cap. This indicates that there was a disinterest in altcoins by market participants. According to the research, Huobi Token was most correlated with Binance Coin (BNB), and both of them are native tokens of digital currency trading platforms. There was also a very high correlation between Ripple’s XRP and Stellar Lumens (XLM). However, most other digital currencies showed their highest correlation with Ethereum (ETH). The average correlation between digital currencies during the third quarter increased from 0.54 to 0.64, with Binance Coin (BNB) displaying a higher correlation to large market digital currencies in the third quarter compared to the second quarter.