{"id":533,"date":"2018-02-21T10:46:13","date_gmt":"2018-02-21T10:46:13","guid":{"rendered":"https:\/\/blockchain-society.science\/?p=533"},"modified":"2018-02-21T10:46:13","modified_gmt":"2018-02-21T10:46:13","slug":"buzz-factor-or-innovation-potential-what-explains-cryptocurrencies-returns","status":"publish","type":"post","link":"https:\/\/blockchain-society.science\/?p=533","title":{"rendered":"Buzz Factor or Innovation Potential: What Explains Cryptocurrencies\u2019 Returns?"},"content":{"rendered":"<blockquote>\n<h2>Abstract<\/h2>\n<h2><a href=\"http:\/\/journals.plos.org\/plosone\/article?id=10.1371\/journal.pone.0169556\"><img src=\"http:\/\/journals.plos.org\/plosone\/article\/figure\/image?size=inline&amp;id=info:doi\/10.1371\/journal.pone.0169556.g001\" class=\"image-treated\" data-original=\"http:\/\/journals.plos.org\/plosone\/article\/figure\/image?size=inline&amp;id=info:doi\/10.1371\/journal.pone.0169556.g001\" data-treated=\"http:\/\/journals.plos.org\/plosone\/article\/figure\/image?size=inline&amp;id=info:doi\/10.1371\/journal.pone.0169556.g001\" \/><\/a><a id=\"article1.front1.article-meta1.abstract1.p1\" class=\"link-target\" name=\"article1.front1.article-meta1.abstract1.p1\"><\/a><\/h2>\n<p>Cryptocurrencies have become increasingly popular since the introduction of bitcoin in 2009. In this paper, we identify factors associated with variations in cryptocurrencies\u2019 market values. In the past, researchers argued that the \u201cbuzz\u201d surrounding cryptocurrencies in online media explained their price variations. But this observation obfuscates the notion that cryptocurrencies, unlike fiat currencies, are technologies entailing a true innovation potential. By using, for the first time, a unique measure of innovation potential, we find that the latter is in fact the most important factor associated with increases in cryptocurrency returns. By contrast, we find that the buzz surrounding cryptocurrencies is negatively associated with returns after controlling for a variety of factors, such as supply growth and liquidity. Also interesting is our finding that a cryptocurrency\u2019s association with fraudulent activity is not negatively associated with weekly returns\u2014a result that further qualifies the media\u2019s influence on cryptocurrencies. Finally, we find that an increase in supply is positively associated with weekly returns. Taken together, our findings show that cryptocurrencies do not behave like traditional currencies or commodities\u2014unlike what most prior research has assumed\u2014and depict an industry that is much more mature, and much less speculative, than has been implied by previous accounts.<\/p><\/blockquote>\n<p>Source: <em><a href=\"http:\/\/journals.plos.org\/plosone\/article?id=10.1371\/journal.pone.0169556\">Buzz Factor or Innovation Potential: What Explains Cryptocurrencies\u2019 Returns?<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Abstract Cryptocurrencies have become increasingly popular since the introduction of bitcoin in 2009. In this paper, we identify factors associated with variations in cryptocurrencies\u2019 market values. In the past, researchers argued that the \u201cbuzz\u201d surrounding cryptocurrencies in online media explained their price variations. But this observation obfuscates the notion that cryptocurrencies, unlike fiat currencies, are [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[27,36,26,6,5],"tags":[],"_links":{"self":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts\/533"}],"collection":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=533"}],"version-history":[{"count":1,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts\/533\/revisions"}],"predecessor-version":[{"id":534,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=\/wp\/v2\/posts\/533\/revisions\/534"}],"wp:attachment":[{"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=533"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=533"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blockchain-society.science\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=533"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}