Return factors of Ether cryptocurrency: on chain metrics and DeFi

Abstract

In this study, we analyse whether such inner features of Ethereum blockchain as creation of smart contracts and decentralized applications influence in any way the price dynamics of Ethereum’s native cryptocurrency Ether or the latter can be mainly explained by the cryptocurrency market movements. Our results show that various on-chain metrics and total value locked in Ethereum’s DeFi protocols are almost insignificantly correlated with Ether returns on daily and weekly data. The corresponding regression models are also not able to explain a sufficient part of the variation of Ether returns relative to USD and BTC.

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