Pricing issues in cryptoassets

Abstract

Subject: digital assets are becoming increasingly popular and important in global financial markets. Commercial organizations, credit institutions and individuals take part in the development. It is digital assets that occupy a special place in modern financial markets. Purpose: analysis of the impact of BTC dynamics on the pricing processes of high capitalized cryptocurrencies and the relationship between the cryptocurrency market and equity markets. Research design: this paper reveals the role of the BTC dynamics, as well as the dynamics of the NASDAQ Composite index, in cryptocurrency market asset pricing. As a research data we used series of weekly prices and returns of the top 10 cryptocurrencies by market capitalization (ETH, BNB, ADA, SOL, DOGE, DOT, MATIC, AVAX, SHIB and TRX), and the NASDAQ Composite for the period from January 2021 to May 2022. Results: the authors found that despite the decrease in BTC dominance the BTC price risks almost instantly spread to the most capitalized cryptocurrencies. Statistically significant relations identified between the dynamics of the NASDAQ Composite index and the cryptocurrencies indicate that the price risks of the stock markets are also taken into account in the prices of cryptocurrencies.