{"title":"(UN) Stable Cryptocurrency Markets: Insights From Volatility Modeling","authors":"Jasmina Džafić, Emir Hečimović","doi":"10.14738/abr.1112.16086","DOIUrl":null,"url":null,"abstract":"The cryptocurrency market has attracted considerable attention from investors and researchers alike. This paper examines the volatility patterns of two major cryptocurrencies utilizing GARCH modeling: Bitcoin, based on a proof-of-work mechanism, and Cardano, operating on a proof-of-stake mechanism. Our findings reveal differences in the volatility structures of the two cryptocurrencies, with Cardano demonstrating a reduced long-term volatility compared to Bitcoin. This study suggests that transitioning from proof-of-work to proof-of-stake mechanisms might lead to a decrease in market volatility.","PeriodicalId":72277,"journal":{"name":"Archives of business research","volume":"54 1","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2024-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Archives of business research","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.14738/abr.1112.16086","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
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Abstract
The cryptocurrency market has attracted considerable attention from investors and researchers alike. This paper examines the volatility patterns of two major cryptocurrencies utilizing GARCH modeling: Bitcoin, based on a proof-of-work mechanism, and Cardano, operating on a proof-of-stake mechanism. Our findings reveal differences in the volatility structures of the two cryptocurrencies, with Cardano demonstrating a reduced long-term volatility compared to Bitcoin. This study suggests that transitioning from proof-of-work to proof-of-stake mechanisms might lead to a decrease in market volatility.
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