Abstract

The field of cryptocurrencies has been in existence and dynamically developing for over 14 years. Each year sees the advent of new cryptocurrencies, with their total count now exceeding 8,500, and it is evident that these differ from one another in some respects. However, there currently exists no exhaustive categorization of cryptocurrencies that could comprehensively describe the landscape of the cryptocurrency market. This situation underpins the relevance of the present study. The object of this study is cryptocurrencies. The aim of the research is to create a taxonomy of cryptocurrencies based on their primary characteristics and functions. The main method of research is a retrospective analysis of the development of the cryptocurrency sector from the creation of Bitcoin to the present day. Over the course of the industry's evolution, new projects emerged, substantially different in their properties from anything that had come before, thus forming entirely new categories and niches in the cryptocurrency space. Furthermore, the advent of certain types of cryptocurrencies could lead to changes in the existing classification. The outcome of this study is a hierarchical categorization (taxonomy) of interchangeable cryptocurrencies/tokens. The proposed taxonomy is supplemented by an in-depth examination of cryptocurrencies belonging to each category, as well as a consideration of the largest cryptocurrencies in terms of capitalization through its prism. The scientific novelty of this research lies in the absence of similar studies that look at the issue of categorizing cryptocurrencies through a historical lens.

Abstract

In this study, we analyse whether such inner features of Ethereum blockchain as creation of smart contracts and decentralized applications influence in any way the price dynamics of Ethereum’s native cryptocurrency Ether or the latter can be mainly explained by the cryptocurrency market movements. Our results show that various on-chain metrics and total value locked in Ethereum’s DeFi protocols are almost insignificantly correlated with Ether returns on daily and weekly data. The corresponding regression models are also not able to explain a sufficient part of the variation of Ether returns relative to USD and BTC.