(UN) Stable Cryptocurrency Markets: Insights From Volatility Modeling
DOI:
https://doi.org/10.14738/abr.1112.16086Keywords:
Financial Innovation, Cryptocurrency, Bitcoin, CardanoAbstract
The cryptocurrency market has attracted considerable attention from investors and researchers alike. This paper examines the volatility patterns of two major cryptocurrencies utilizing GARCH modeling: Bitcoin, based on a proof-of-work mechanism, and Cardano, operating on a proof-of-stake mechanism. Our findings reveal differences in the volatility structures of the two cryptocurrencies, with Cardano demonstrating a reduced long-term volatility compared to Bitcoin. This study suggests that transitioning from proof-of-work to proof-of-stake mechanisms might lead to a decrease in market volatility.
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Copyright (c) 2023 Jasmina Džafić, Emir Hečimović
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