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Transitions in the cryptocurrency market during the COVID-19 pandemic: A network analysis
1Department of Economics, Universitat Jaume I, Campus del Riu Sec, 12071 - Castellón, Spain.
Abstract:
In this letter, we identify the transitions of the cryptocurrency market during the pandemic by means of a network analysis. This method allows us to observe that COVID-19 significantly affected cryptocurrencies during a short period of financial panic, from 12 March 2020 to 1 April 2020, giving rise to a remarkable increase of market synchronisation. However, since April 2020, the cryptocurrency market progressively recovered its initial state, since the strong synchronisation, observed as a consequence of COVID-19, continuously disappeared. Therefore, our analysis highlights different market phases, which can be related to some of the phenomena reported in the existing literature.
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