Technological progress invariably contributes to the development of our society.
Every year, new devices and programs appear that can perform an unimaginable
number of functions that for a long time remained only the ultimate dream.
In the 2010s, a technological revolution was also taking shape in the financial
sector. If earlier many innovations, including contactless payment methods and
business digitalization, did not have a significant impact on the very essence of
work, but only simplified data analysis, then the “blockchain” principle, which
turned out to be applicable in finance, is able to turn everything upside down .
And while large corporations are still developing strategies to introduce
blockchain into their operations, many enthusiasts are already making their own
developments using this promising technology. Most of them belong to the so-
called cryptocurrencies, which will be discussed in this paper.
The emergence of a new financial instrument inevitably led to the study of the
mechanisms of its value formation. As the number of speculators grows daily,
more and more people are wondering how to manage risk when investing in
cryptocurrencies.
The purpose of this work is to test the hypothesis about the impact of events on
the pricing of cryptocurrency. The purpose of this analysis is to empirically test
the hypothesis about the reaction of the market to certain events.
To achieve the goal, the following tasks were set:
➢ Research the cryptocurrency market, highlight the main players and
identify the differences between them.iii
➢ Build a regression model based on historical data for the value of the
selected cryptocurrencies.
➢ Choose a method for analysis that will allow you to confirm or refute the
hypothesis about the impact of events on cryptocurrency pricing.
➢ Using the chosen method, check this hypothesis for the selected
cryptocurrencies.
➢ Analyze the simulation results obtained in this work.
This work consists of an abstract, six chapters with conclusion. The first chapter is
devoted to the analysis of the cryptocurrency market and its main participants. In
particular, about the history of the creation of cryptocurrency, as well as about the
basic definition of cryptocurrency. Cryptocurrencies for study in this paper are
also selected and a detailed description of each of them is given, including the
mechanism of operation and the main areas of application. Despite the fact that
many consider the term “cryptocurrency” and bitcoin to be synonymous, there are
a large number of different instruments on the market, and each of them has its
own characteristics that affect the formation of their value.
The second part includes an overview of the factors affecting the value of the
cryptocurrency, as well as the legal status of the cryptocurrency in the modern
world. In addition, the main functions and main users of the cryptocurrency were
considered.
The third chapter contains the research methodology, including the rationale for
choosing a method for analyzing the impact of events, as well as the features of
building regression models for each of the cryptocurrencies.
The fourth chapter is devoted to modeling and analyzing the impact of events on
the value of a cryptocurrency using the method of analyzing the impact of events.
In particular, two events were chosen as modeling (September crypto crisis in China and Cryptocurrency legalization in Japan in early 2017)
In the fifth chapter, the results of cryptocurrency price modeling were considered, namely, the price change and the result of ongoing world events.
In conclusion, the results achieved as a result of the work were formulated: based on the analysis of the impact of events, it was concluded that each of the three cryptocurrencies considered tends to respond to external events. At the same time, Bitcoin and Ethereum tend to lose value on negative events and rise on positive ones, while the change in the value of Ripple is not so clear and less predictable.
The features of the pricing of the Ripple cryptocurrency were considered, as well as its wide possibility of use in various fields, efficiency and reliability.
Most sources of information explore the cryptocurrency market, including the Internet portal "Kaggle.com", which publishes various studies on this topic, specialized sites "Blockchain.info" and "Etherscan", which accumulate statistical information about bitcoins and ethereum, respectively, and etc. A complete list of sources used is available in the list of references.
