Abstract
Background: Islamic cryptocurrencies are different from conventional ones in that they are backed by physical assets and are based on religious principles. After the COVID-19 pandemic, cryptocurrencies showed different behavior. However, there are not many studies on the efficiency, in its weak form, of these three typical families of cryptocurrencies (Islamic, green, and traditional).
Purpose: This study compares the efficiency levels of Islamic cryptocurrencies (HelloGold), green cryptocurrencies (Cardano, NANO, Stellar, IOTA), and traditional cryptocurrencies (BTC and ETH) in the preceding period and during the geopolitical conflict between Russia and Ukraine in 2022.
Methods: This research will use Lo and Mackinlay's (1988) variance ratio methodology, and the Detrended Fluctuation Analysis (DFA) model will be used.
Results: The results indicate that the Islamic currency HGT and the green currency XNO display significant information asymmetries, rejecting the random walk hypothesis for various time intervals. Similarly, other green currencies such as XLM, ADA, and MIOTA, as well as ETH and BTC, reject the hypothesis to varying degrees and time intervals. Furthermore, the Islamic cryptocurrency (HelloGold) was anti-persistent before and during the conflict. The digital currencies ADA and BTC are persistent in both periods. ETH is in equilibrium in the pre-conflict period and becomes persistent during the conflict (0.50 - 0.56), while MIOTA and XLM are persistent during the pre-conflict period and shift to equilibrium during the Russian invasion of Ukraine in 2022. Finally, the XNO eco-currency shows the same anti-persistence characteristics during the two sub-periods.
Conclusion: These results highlight the complexity and dynamics of cryptocurrency markets, indicating that different digital currencies can exhibit different temporal behaviors regarding information efficiency and persistence or anti-persistence patterns.
Publisher
RGSA- Revista de Gestao Social e Ambiental