Risk Analysis Of Cryptocurrency Market

Since Satoshi Nakamoto proposed the concept of Bitcoin in 2008,a large number of new cryptocurrencies have continuously emerged,and the price of cryptocurrencies have also skyrocketed and plunged.A large number of investors have poured into the cryptocurrency market frantically,hoping to get a great share of this frenzy market.However,having little knowledge about the overall development of cryptocurrencies,the size and causes of market risks,these investors have overlooked the potential risks behind cryptocurrencies and have made wrong judgments and investment choices about cryptocurrencies.This article aims to systematically analyze the market risk of the cryptocurrency.Firstly,this article introduces the relevant concepts and technical principles of cryptocurrencies,and shows the technical characteristics of Bitcoin and Ethereum in detail.Secondly,from the macro perspective,the development of the digital cryptocurrency industry chain is analyzed.At the same time,it sorts out the current regulatory attitudes of various countries towards cryptocurrencies.Furthermore,it focused on the two major cryptocurrencies,Bitcoin and Ethereum,and analyzed the development process,characteristics and application changes of the two in detail.And,taking Bitcoin as an example,the GARCH-EVT method is introduced to measure the price risk of Bitcoin,and the accuracy of this method is compared with the Kuipiec backtest method.Furthermore,the causes of risk are analyzed from both sides of the market supply and the subjective level of investors.Finally,combined with the previous analysis,this article proposes corresponding risk response suggestions from the level of macro regulators to the level of micro participants.