article · Sustainable Futures
This study examined Bitcoin and Ethereum price dynamics between 2013 and 2022, employing both financial market technical analysis, using indicators like the Relative Strength Index and Hull moving average, and econometric analysis, involving the Hodrick-Prescott filter and an Autoregressive Distributed Lag model. The research identified supercycle years for both cryptocurrencies in 2013, 2017, and 2021. It highlighted Bitcoin's average 3.5-year cycle and emphasised the significant impact of Bitcoin halving on the formation of supercycle bubbles, which also affected altcoins such as Ethereum. The findings offer implications for portfolio management, suggesting careful diversification and a proactive regulatory approach, especially during Bitcoin halving periods.
Understanding the cyclical nature of cryptocurrency prices, especially the impact of Bitcoin halving, is crucial for investors and regulators. This research helps to explain market bubbles and provides insights for managing investment risks and developing appropriate policies in the volatile digital asset space.
This research offers direct, applied insights for financial professionals involved in cryptocurrency portfolio management. It provides a basis for developing strategies for asset diversification and risk mitigation, particularly around Bitcoin halving events. Regulators could also use these findings to inform proactive policy development for the digital asset market. This is applied research with immediate practical recommendations for financial and regulatory sectors.
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This study examines the price dynamics of Bitcoin and Ethereum between 2013 and 2022 using two distinct approaches: financial market technical analysis and econometric analysis. Financial market technical analysis employs indicators such as the Relative Strength Index (RSI) and the Hull moving average, while econometric analysis involves the Hodrick-Prescott filter and an Autoregressive Distributed Lag (ARDL) model. The study shows that Bitcoin and Ethereum experienced supercycle years in 2013, 2017, and 2021. The Bitcoin cycle, which averages 3.5 years, was particularly emphasized. The impact of the Bitcoin halving is also noteworthy, especially in the formation of supercycle bubbles in 2021, which affected altcoins such as Ethereum. The implications of this extend to portfolio management advice. It is recommended to carefully evaluate portfolio diversification and adopt a proactive regulatory approach, especially during the Bitcoin halving period.
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DOI: 10.1016/j.sftr.2024.100178
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