Analyzing the Relationship among Cryptocurrencies using Complex Networks

TL;DR

This study uses complex network analysis to explore relationships among the top 19 cryptocurrencies from 2017 to 2024, revealing community structures and market trends influenced by COVID-19 and geopolitical factors.

Contribution

It introduces a novel network-based approach to analyze cryptocurrency relationships and community structures over an extended period, including the COVID-19 impact.

Findings

Identification of three distinct crypto communities.

Increase in the number of cryptocurrencies over time.

COVID-19 and geopolitical events influence market dynamics.

Abstract

Our analysis focuses on the stock cryptocurrency market, by studying a group of nineteen cryptocurrencies where their capitalisation is about 99% of the total market. Specifically, it is examined this group of cryptocurrencies for the period from 2017 up to 2024, taking into account the effect of COVID-19 pandemic. As far as we know, this is the first time that this kind of study has been published, where it takes place by creating various networks based on stock cryptocurrency correlation, in order to be possible to visualise and access these relationships using methods from Complex Networks. The evaluation results show that, there are three different communities within the crypto market and although COVID-19 pandemic and ongoing geopolitical changes, there is a notable trend towards an increase in the number of cryptocurrencies. Additionally, it is applied discriminant analysis to identify the differences among various cryptocurrencies based on their features.