Andrea Baronchelli, the Economic Data Science Theme Researcher, has said that more research on the topic of crypto code/price correlation may be on the horizon after the recent release of the team’s preprint report, which correlates crypto code with prices, as he said that the group looks toward further study in the field.
Further Research Planned for Crypto Code Price Correlation: After the release of a preprint report which correlates crypto code with prices, a member of the research team said the group looks toward further study in the field. https://t.co/QLZQeExCmQ pic.twitter.com/5ybx23gGDt — Future Bitcoin (@Future_Bitcoin) April 19, 2020
Baronchelli said of the recent preprint report, titled, ‘From code to market: Network of developers and correlated returns of cryptocurrencies’:
“This is really the first step.”
“We plan to look at what happens when multiple developers work on the same two projects, and at the semantics of the edits they make.”
Also, he said:
“Our analysis has concerned pairs of cryptos so far but we plan to explore whether there are more general network effects that affect simultaneously the market behavior of larger groups of cryptos.”
It has been reported that in its preprint released last week, the team found a connection between crypto asset prices and the developers who worked on the code for those assets.
By nature, cryptocurrencies hold a reputation as separate entities.
However, the report found that asset prices may act in a certain way based on the developers behind them.
Andrea Baronchelli, Economic Data Science Theme Researcher
It has been analyzed that the mainstream crypto audience understands the phrase “code is law” to mean a lack of correlation between assets due to their differing underpinnings, as this was the starting point of the team’s research.
Baronchelli said that the group had already become aware of the impact collaboration networks have on a large number of fields by spanning the open source dimension, as well as the broader science world in general.
By using GitHub, Baronchelli also said that the team looked into which assets individual developers had worked on, noting any overlap. The study uncovered that 4% of developers contributed to the codebase of multiple crypto assets.
From there, the group hypothesized an effect on each asset’s price, resulting from such underlying asset correlations.
“The data showed we were right. After a link is created between codes, the returns of the corresponding cryptos start correlating, on average.”
Likewise, over the past several years, altcoins have often moved up at price together by garnering the coining of the term “altseason.” At other times, certain crypto assets historically have moved together in smaller bunches.
Thus, this added research from Baronchelli and the team may lead to an underlying explanation of this price activity, beyond the simply being herd mentality at work.