Cryptoasset markets are continuing to mature at a rapid pace; and with this maturation comes an increased ability to quantify what drives digital asset prices. Social investing platform eToro and The Tie have quantified these fundamentals as part of a broader report that examines the main themes in the industry over the past quarter.
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Crypto asset markets have their own unique market structure that often differs dramatically from traditional markets. This has led many to proclaim they aren’t real assets and that they are driven only by speculators fueled by fear of missing out (FOMO) and fear, uncertainty and doubt (FUD). These observations are way off the mark, this latest research has found.
“There are many factors driving the price of bitcoin, ETH, and the many other altcoins currently dominating news headlines about our industry,” said Guy Hirsch, US Managing Director for eToro, adding “knowing what’s behind these directional moves will only help investors become more familiar with them and help to grow our rapidly developing industry.”
Some of the report’s key findings include:
- The hype of a listing or partnership announcement tends to wear off within a week. For example, Aragon (ANT) gained 24% in the 24 hours after it was listed on OKex, but a concurrent listing on Binance and Huobi resulted in a 164% 24 hour gain; but the token has since fallen below it’s listing price.
- Funding and mergers and acquisitions announcements have positive effects that often extend beyond a week. For example, FTX’s acquisition of Blockfolio brought a significant number of additional users into the FTX ecosystem. In just over a week following the acquisition, the price of FTX surged by 33%.
- Token burns yield the most consistent returns over a day with a 100% probability of a price increase within the day, an average of 2.13%, but those gains are only temporary
Additionally, the report found that regulatory announcements have a larger effect when they come from news outlets, and airdrops are better supported by Twitter activity than anything else.
The report also includes a deep dive into decentralized finance (DeFi)’s effect on ETH prices, and a breakdown of the top performing cryptoassets on eToro.
eToro launched its crypto trading platform in the US in March 2019. Since then, US registrations on eToro have increased over 220 percent.
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