Bitcoin as a leader of crypto-currencies

Book analyzes high correlation between the monopolistic leader of crypto-currency market Bitcoin and its followers so called altcoins. The first research question follows the everyday life situation of a younger brother trying to imitate follow or even outrun his elder. Do alternative crypto-currencies follow the price development of their leader? Our book presents positive answer to this question as analysis of all altcoins included in this paper (Litecoin Ripple Peercoin and Dogecoin) proved strong causality from the Bitcoin's point of view. Subsequently we analyzed this relationship into deeper details for each currency using vector autoregressive model and consecutive impulse-response function. In the second part of this book we build on our previous findings with the following research question. May the price development of altcoins be effectively predicted based on the price development of bitcoin? In this regard we used static forecast in combination with Diebold-Mariano test evaluating forecasting accuracy. Book uses advanced econometric methods to help you better understand attractive crypto-currency market.