The cryptocurrency market has gained popularity in the last few years. Additionally, there is the availability of data on price fluctuations on cryptocurrency exchanges. Thus, statistical analysis can be conducted to identify the characteristics of the cryptocurrency market. This chapter aims to identify the characteristics of the cryptocurrency market in India and clarify to what extent the cryptocurrency market is similar or different from the traditional financial market of stock, currency, derivatives, commodities, and bonds. Thus, this chapter presents the history and development of the cryptocurrency market in India, cryptocurrency exchanges operating in India, and the differences between the cryptocurrency market and the traditional financial market. The chapter also presents the analysis of fluctuation in prices of cryptocurrency on varied platforms such as CoinSwitch, Binance, CoinMarketCap, etc. The statistical properties of the cryptocurrency market are compared with the traditional financial market.
TopIntroduction
Currently, financial markets are moving towards artificial intelligence, machine learning, and developing models which are quicker and more exacting (Milana & Ashta, 2021). Financial markets are adopting these technologies to identify risks & trends in the market, better data management for planning, and save manpower energy (Popkova & Parakhina, 2018). For instance, organizations like Kavout are using quantitative analysis and machine learning to process unstructured data sets and to identify the trends in the market. One of the examples of adoption of such technology by financial companies is ‘Kai Score’ an ‘artificial intelligent’ app by Kavout for analyzing a large amount of data and providing results of a pattern of prices & SEC filings and converting this data into numerical form i.e. providing ranks to separate stocks. Another example is ‘Alphasense’ which is a search engine powered by AI for the financial sector i.e. this search engine is specifically serving investment companies, banks, and fortune 500 companies (Corea, 2019). This search engine processes financial keywords using natural language for discovering trends & changes in financial markets. This search engine is found valuable for various financial organizations and professionals, especially broking firms and brokers. This search engine allows traders and brokers to access information, press releases, earnings call transcripts, global filings, and SEC.
In recent years, financial market intermediaries have witnessed hacking and cyber theft incidents. The regulator of the capital market in India, SEBI, has said that it will conduct penetration & vulnerability testing for its entire IT system, websites of MIIs & other intermediaries (Nachane, 2018). Additionally, SEBI said that with increased usage of technology in the capital market, a separate cell for inspection & surveillance is required.
The current study presents the history and development of the cryptocurrency market in India, cryptocurrency exchanges operating in India, and the differences between the cryptocurrency market and the traditional financial market. The chapter also presents the analysis of fluctuation in prices of cryptocurrency on varied platforms such as CoinSwitch, Binance, CoinMarketCap, etc. The statistical properties of the cryptocurrency market are compared with the traditional financial market. In the last, this chapter concludes the arbitrage or hedging opportunity in the cryptocurrency market for investors.
The motive of study is to identify the characteristics of the cryptocurrency market in India and clarify to what extent the cryptocurrency market is similar or different from the traditional financial market of stock, currency, derivatives, commodities, and bonds. The study contributes in providing history and development of cryptocurrency market in India, cryptocurrency exchanges operating in India, differences between cryptocurrency market and traditional financial market. The study also presents the analysis of fluctuation in prices of cryptocurrency on varied platforms such as CoinSwitch, Binance, CoinMarketCap, etc. The statistical properties of cryptocurrency market are compared with traditional financial market. The current study can be referred by academicians, marketers, industry people and policy makers. The study encourages companies and academicians to further investigate the usage of blockchain in insurance.
The next section presents the basic concepts and terminologies related to cryptocurrency.