Anonymous cryptocurrencies heavily depend on Bitcoin: the study

To the naked eye it may seem that anonymous coins move on their own, independently from the rest of the stock market. Also there is the assumption that they carry a higher risk, as are often used in illegal activities attract too much attention of regulators. But there are those who believe in the benefits of investment in anonymous coins for its resistance to censorship. In the end, it turned out that their behavior is essentially no different from the rest of the cryptocurrency world.

Analysts from the Longhash inspected historical data on the price of the dollar Coin Metrics and statistics based on anonymous coins including Monero, zcash for and Dash. And compare all this with the performance of Bitcoin to find out how much these coins were correlated. That is how to relate the motion of their courses.

Recall that the correlation — a statistical relationship between two or more random variables. Changes in the values of one or more of these variables cause systematic changes in the values of another or other quantities. The closer the coefficient is to unity, the stronger the Association.

The following tables show the Pearson correlation coefficient. It should be noted, other methods of calculating correlations also give similar results. For example, the price of Monero and Dash highly correlated with the price of the largest cryptocurrencies. Price zcash for is also related to the price behaviour of Bitcoin, but not so much.

The diagram below shows the Pearson correlation coefficient between intraday prices of each token in its history. The most since the exchange rate of Bitcoin is linked to the price of Monero XMR. The coefficient of their relationship is 0.86.

Any score above 0.7 is considered evidence of a strong correlation. Source: Longhash

The following chart gives a visual to understand that historically there is a very strong connection between all these anonymous cryptocurrencies and Bitcoin. Excluding small periods of their paths move in the same direction.

Prices anonymous cryptocurrency in dollar terms from July 2016 to December 2019. Source: Coin Metrics

However, when comparing the same correlation from year to year significantly reduced the correlation between Bitcoin and tokens with a high level of confidentiality. All three token seriously correlated with Bitcoins in 2017 and 2018, but at the moment the zcash for binding and Dash to the BTC greatly subsided. If you understand the data further and look for the second half of 2019, then from 1 July to 9 December, all three tokens again highly correlated with the leading currency.

The index of correlation of anonymous cryptocurrencies with the Bitcoin price in the second half of 2019. Source: Coin Metrics

Of course, does not exclude the scenario of further distancing the anonymous cryptocurrency from Bitcoin. This may be due to the additional pressure of regulators and due to the fact that attackers will use in illegal activities, fewer bitcoins and more and more anonymous coins. Recall the problem of sensitive cryptocurrency trading platforms do have. For example, 19 Feb 2020 to support Monero will cease the exchange BitBay. About other cases of delisting, we wrote in a separate article.

In cryptodata anonymous hontarov there are still a lot of other useful information. Also visit Yandex Zen.

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