SHS Web Conf.
Volume 107, 20219th International Conference on Monitoring, Modeling & Management of Emergent Economy (M3E2 2021)
|Number of page(s)||59|
|Published online||24 May 2021|
Econophysics of cryptocurrency crashes: an overview
Kryvyi Rih State Pedagogical University, 54 Gagarin Ave., Kryvyi Rih, 50086, Ukraine
2 The Bohdan Khmelnytsky National University of Cherkasy, 81 Shevchenko Blvd., Cherkasy, 18031, Ukraine
3 Kryvyi Rih National University, 11 Vitalii Matusevych Str., Kryvyi Rih, 50027, Ukraine
4 Institute of Information Technologies and Learning Tools of the NAES of Ukraine, 9 M. Berlynskoho Str., Kyiv, 04060, Ukraine
5 University of Educational Management, 52-A Sichovykh Striltsiv Str., Kyiv, 04053, Ukraine
Cryptocurrencies refer to a type of digital asset that uses distributed ledger, or blockchain technology to enable a secure transaction. Like other financial assets, they show signs of complex systems built from a large number of nonlinearly interacting constituents, which exhibits collective behavior and, due to an exchange of energy or information with the environment, can easily modify its internal structure and patterns of activity. We review the econophysics analysis methods and models adopted in or invented for financial time series and their subtle properties, which are applicable to time series in other disciplines. Quantitative measures of complexity have been proposed, classified, and adapted to the cryptocurrency market. Their behavior in the face of critical events and known cryptocurrency market crashes has been analyzed. It has been shown that most of these measures behave characteristically in the periods preceding the critical event. Therefore, it is possible to build indicators-precursors of crisis phenomena in the cryptocurrency market.
© The Authors, published by EDP Sciences, 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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