Practical Applications of Cryptocurrency Survival Analysis

Abstract

Practical Applications Summary In Cryptocurrency Survival Analysis, from the Winter 2020 issue of The Journal of Alternative Investments, Jan Lansky (University of Finance and Administration) investigates the probabilities of individual cryptocurrencies being delisted. Although exchanges list more than 2,500 cryptocurrencies, a very high percentage of them ultimately will be delisted. Lansky provides background on cryptocurrencies, describes the data collection procedure, tallies live and dead cryptocurrencies, and shows how to calculate conditional probabilities of their demise. Most cryptocurrencies fail within five years of being listed on an exchange, yet the conditional probability of survival increases with the life of the cryptocurrency. For example, the probability of being delisted within one year is 35% for a new cryptocurrency, 27% after trading for one year, 19% after trading for two years, and 12% after three years. TOPICS:Currency, statistical methods, risk management, exchanges/markets/clearinghouses