Can We Predict the Winner in a Market with Network Effects? Competition in Cryptocurrency Market

  title={Can We Predict the Winner in a Market with Network Effects? Competition in Cryptocurrency Market},
  author={Neil Gandal and Hanna Halaburda},
We analyze how network effects affect competition in the nascent cryptocurrency market. We do so by examining early dynamics of exchange rates among different cryptocurrencies. While Bitcoin essentially dominates this market, our data suggest no evidence of a winner-take-all effect early in the market. Indeed, for a relatively long period, a few other cryptocurrencies competing with Bitcoin (the early industry leader) appreciated much more quickly than Bitcoin. The data in this period are… Expand
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