On the Complexity and Behaviour of Cryptocurrencies Compared to Other Markets

Abstract

We show that the behaviour of Bitcoin has interesting similarities to stock\nand precious metal markets, such as gold and silver. We report that whilst\nLitecoin, the second largest cryptocurrency, closely follows Bitcoin's\nbehaviour, it does not show all the reported properties of Bitcoin. Agreements\nbetween apparently disparate complexity measures have been found, and it is\nshown that statistical, information-theoretic, algorithmic and fractal measures\nhave different but interesting capabilities of clustering families of markets\nby type. The report is particularly interesting because of the range and novel\nuse of some measures of complexity to characterize price behaviour, because of\nthe IRS designation of Bitcoin as an investment property and not a currency,\nand the announcement of the Canadian government's own electronic currency\nMintChip.\n