Crypto Dynamics: Analyzing The Price Interplay Between Bitcoin And Ethereum

Abstract

This study investigates the price dynamics of Bitcoin and Ethereum using a descriptive research design to analyze historical price data from April 2019 to April 2024. Daily price data for Bitcoin and Ethereum is sourced from reputable financial databases and cryptocurrency market websites. In this study advanced econometric techniques, are used to identify patterns and develop a model for future price prediction. Key methodologies include the Augmented Dickey-Fuller (ADF) test for stationarity, the Johansen cointegration test for long-term equilibrium relationships, and the Vector Error Correction Model (VECM) to examine short-term dynamics and long-term adjustments. The VECM highlights the interdependencies, showing that Bitcoin significantly influences Ethereum prices, with Ethereum exhibiting a self-corrective mechanism.