Binance Research, the market research and analysis arm of global cryptocurrency exchange, Binance, has released a report on categorizing cryptoassets. Bitcoin and Ethereum have exhibited the highest correlations, while Ripple has lower correlations that might classify it as a diversifier among crypto assets.
Binance Research’s report, titled “Categorizing Cryptoassets: A Return-Driven Cluster Analysis,” stated that digital assets can be grouped into several sub-segments, using a correlation matrix along with hierarchical clustering.
“In this report, cluster analysis over the twelve previous trading months (March 2018 to March 2019) was conducted to distinguish whether cryptoasset clusters, constructed using an unsupervised learning approach, can be created and more importantly, interpreted,” said Binance Research.
Bitcoin forks (Bitcoin Gold and Bitcoin Cash), Ethereum Classic and Litecoin form a single cluster. Binance Research also identified other potential groups of cryptoassets based on certain effects, including:
- Potential geographical effects such as a dichotomy between American and Asian cryptoassets.
- A “Coinbase listing effect”: some assets that were reported to be listed or investigated by Coinbase seemed to belong to similar clusters.
About Binance Research
Binance Research provides professional, data-driven insights and analysis for investors in the crypto space to increase the level of transparency and improve the quality of information within the current crypto ecosystem. The team consists of professionals with a background and experiences in blockchain engineering, investment banking, strategy consulting, academic research and data science. For more information, visit: https://research.binance.com/