Cryptocurrency Market Analysis: Insights from Metcalfe’s Law and Log-Periodic Power Laws

Ginavar Andrei-Theodor (), Conda Alexandra Ioana (), Pele Daniel Traian (), Mazurencu-Marinescu-Pele Miruna () and Manea Daniela-Ioana ()
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Ginavar Andrei-Theodor: Bucharest University of Economic Studies, Bucharest, Romania
Conda Alexandra Ioana: Bucharest University of Economic Studies, Bucharest, Romania
Pele Daniel Traian: Bucharest University of Economic Studies, Bucharest, Romania
Mazurencu-Marinescu-Pele Miruna: Bucharest University of Economic Studies, Bucharest, Romania
Manea Daniela-Ioana: Bucharest University of Economic Studies, Bucharest, Romania

Proceedings of the International Conference on Business Excellence, 2025, vol. 19, issue 1, 490-505

Abstract: This study examines the statistical characteristics of Bitcoin and the CRIX index through a dual analytical framework: Metcalfe’s network law and bubble dynamics via Log-Periodic Power Law (LPPL) modeling. The findings suggest that, over the medium to long term, Metcalfe’s law—which posits that a network’s value scales with the square of its user base—serves as a valid approach for assessing cryptocurrency value. However, its applicability to Bitcoin in the short term remains uncertain. To analyse price dynamics during speculative bubbles, the DS LPPLS method was employed, enabling the identification of bubble phases and the estimation of potential regime shifts. Ultimately, the research concludes that while Metcalfe’s law holds true over longer time horizons, its reliability in short-term scenarios and under varying data regimes is considerably questionable.

Keywords: Cryptocurrency; Bitcoin; CRIX; Metcalfe’s law; Log-Periodic Power Law; speculative bubbles; herding behavior (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:poicbe:v:19:y:2025:i:1:p:490-505:n:1004

DOI: 10.2478/picbe-2025-0040

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