Bitcoin return: Impacts from the introduction of new altcoins

Nguyen, T, Nguyen, B, Nguyen, T and Nguyen, Q 2019, 'Bitcoin return: Impacts from the introduction of new altcoins', Research in International Business and Finance, vol. 48, pp. 420-425.

Document type: Journal Article
Collection: Journal Articles

Title Bitcoin return: Impacts from the introduction of new altcoins
Author(s) Nguyen, T
Nguyen, B
Nguyen, T
Nguyen, Q
Year 2019
Journal name Research in International Business and Finance
Volume number 48
Start page 420
End page 425
Total pages 6
Publisher Elsevier
Abstract The model predicting Bitcoin price formation remains a mystery to academia and investors. Newly invented cryptocurrencies (alternative coins - altcoins) with enhanced features may become close substitutes to Bitcoin in terms of risk diversification. Employing Autoregressive-Distributed-Lag (ARDL) estimations, we document the evidence that the introduction of a new altcoin tends to lower Bitcoin return by 0.7% which is substantial given that the average and median daily returns of Bitcoin are 0.63% and 0.27%, respectively. Our study suggests that the negative impact of an Initial Public Offering on existing stock prices can also be observed in the cryptocurrency market: altcoin introductions reduce Bitcoin return.
Subject Financial Economics
Keyword(s) Bitcoin
Price formation
DOI - identifier 10.1016/j.ribaf.2019.02.001
Copyright notice © 2019 Elsevier B.V. All rights reserved.
ISSN 0275-5319
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