Ethereum (ETH) became the most correlated cryptocurrency in the market during Q3. This is according to a recent report released by Binance Research a few hours ago. Bitcoin (BTC) and Ethereum registered a correlation coefficient of 0.81 over the third quarter of 2019.
The correlation coefficient is used to measure how strong the relationship between the two variables is – in this case, two cryptocurrencies. With this correlation, we can understand how digital currencies behave when the market surges or falls. If two coins are highly correlated, then they would perform and act similarly.
If these two cryptocurrencies are not correlated at all, they will behave randomly. If they are inversely related, that means that if one grows, the other would probably fall.
The second-largest cryptocurrency registered the most significant correlation in the cryptocurrency market compared to other digital assets.
One of the things the report says is that programmable blockchains, including Ethereum, exhibited, on average, a higher correlation with each other than with non-programmable assets.
At the same time, Proof of Work (PoW) assets has also exhibited a more considerable correlation with each other. That includes Ethereum.
Nevertheless, it is worth pointing out that Ethereum is currently transitioning to Proof of Stake (PoS). It would be interesting to see whether this migration would impact Ether’s correlation with other assets.
The report explains that even though Ethereum displayed the most substantial correlation with most of the crypto assets in the market, it also had a surprisingly low association with Ethereum Classic (ETC).
With this cryptocurrency, ETH registered a correlation coefficient of 0.69.
Finally, there is only one cryptocurrency that registered a higher correlation with Bitcoin than Ethereum. Decred (DRC) had a correlation of 0.82 compared to 0.81 of Ethereum.
The least correlated asset with Ethereum was Crypto.com coin (CRO) with a correlation coefficient of 0.2. The cryptocurrency with the most significant correlation with Ethereum during the third quarter of this year was Bitcoin Cash (BCH).
At the moment, Ethereum has a market capitalization of $20.14 billion and a price per coin of $186.
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