Cryptocurrency Markets

There are no solid arguments to sustain that digital currencies are the future of online payments or the disruptive technology that some of its former participants declared when used to face critiques. Bitcoin, the first successful, cryptocurrency in an amalgam of economical and information technology definitions. In regard of the factors that determine the price, through a time-varying method it has been found that interest for the people is the main factor associated with the price. However, it is still unsolved why the cryptocurrency market is as volatile as it is, for that sake, it has been studied the crypto-market from a behavioral finance perspective to try to find the parallelism between the literature on biases present in financial markets that serve as a starting point to understand crypto-markets. Moreover, it is suggested that cryptocurrencies' prices are driven by herding, hence this study tests behavioral convergence under the assumption that prices "as-is" are the coordination mechanism. For this task, it has been proposed an empirical herding model based on @Chang2000 methodology, and expanding the model both under asymmetric and symmetric conditions and the existence of different herding regimes by employing the Markov-Switching approach.