On the role of stablecoins in cryptoasset pricing dynamics
Abstract We examine the interactions between stablecoins, Bitcoin, and a basket of altcoins to uncover whether stablecoins represent the investors’ demand for trading and investing into cryptoassets or rather play a role as boosting mechanisms during cryptomarkets price rallies. Using a set of instr...
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| Format: | Article |
| Language: | English |
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SpringerOpen
2022-04-01
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| Series: | Financial Innovation |
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| Online Access: | https://doi.org/10.1186/s40854-022-00343-8 |
| _version_ | 1817988645407162368 |
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| author | Ladislav Kristoufek |
| author_facet | Ladislav Kristoufek |
| author_sort | Ladislav Kristoufek |
| collection | DOAJ |
| description | Abstract We examine the interactions between stablecoins, Bitcoin, and a basket of altcoins to uncover whether stablecoins represent the investors’ demand for trading and investing into cryptoassets or rather play a role as boosting mechanisms during cryptomarkets price rallies. Using a set of instruments covering the standard cointegration framework as well as quantile-specific and non-linear causality tests, we argue that stablecoins mostly reflect an increasing demand for investing in cryptoassets rather than serve as a boosting mechanism for periods of extreme appreciation. We further discuss some specificities of 2017, even though the dynamic patterns remain very similar to the general behavior. Overall, we do not find support for claims about stablecoins being bubble boosters in the cryptoassets ecosystem. |
| first_indexed | 2024-04-14T00:37:36Z |
| format | Article |
| id | doaj.art-45bd60f199904c5ea4d31752ad0d7a68 |
| institution | Directory Open Access Journal |
| issn | 2199-4730 |
| language | English |
| last_indexed | 2024-04-14T00:37:36Z |
| publishDate | 2022-04-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Financial Innovation |
| spelling | doaj.art-45bd60f199904c5ea4d31752ad0d7a682022-12-22T02:22:19ZengSpringerOpenFinancial Innovation2199-47302022-04-018112610.1186/s40854-022-00343-8On the role of stablecoins in cryptoasset pricing dynamicsLadislav Kristoufek0Institute of Economic Studies, Faculty of Social Sciences, Charles UniversityAbstract We examine the interactions between stablecoins, Bitcoin, and a basket of altcoins to uncover whether stablecoins represent the investors’ demand for trading and investing into cryptoassets or rather play a role as boosting mechanisms during cryptomarkets price rallies. Using a set of instruments covering the standard cointegration framework as well as quantile-specific and non-linear causality tests, we argue that stablecoins mostly reflect an increasing demand for investing in cryptoassets rather than serve as a boosting mechanism for periods of extreme appreciation. We further discuss some specificities of 2017, even though the dynamic patterns remain very similar to the general behavior. Overall, we do not find support for claims about stablecoins being bubble boosters in the cryptoassets ecosystem.https://doi.org/10.1186/s40854-022-00343-8CryptocurrenciesCryptoassetsBitcoinStablecoinsTether |
| spellingShingle | Ladislav Kristoufek On the role of stablecoins in cryptoasset pricing dynamics Financial Innovation Cryptocurrencies Cryptoassets Bitcoin Stablecoins Tether |
| title | On the role of stablecoins in cryptoasset pricing dynamics |
| title_full | On the role of stablecoins in cryptoasset pricing dynamics |
| title_fullStr | On the role of stablecoins in cryptoasset pricing dynamics |
| title_full_unstemmed | On the role of stablecoins in cryptoasset pricing dynamics |
| title_short | On the role of stablecoins in cryptoasset pricing dynamics |
| title_sort | on the role of stablecoins in cryptoasset pricing dynamics |
| topic | Cryptocurrencies Cryptoassets Bitcoin Stablecoins Tether |
| url | https://doi.org/10.1186/s40854-022-00343-8 |
| work_keys_str_mv | AT ladislavkristoufek ontheroleofstablecoinsincryptoassetpricingdynamics |