PECULIARITIES OF THE MEDIUM ECONOMIC CYCLE PHASES IN THE CRYPTOCURRENCY MARKET IN 2022: INVESTMENT PERSPECTIVES
Keywords:investment, cryptocurrency market, cryptocurrency, cryptocoin, cryptoassets, Ether
Introduction. Economic cyclicality is inherent both to the functioning of the financial market in general, and to its albeit new and relatively young, but integral component – the cryptocurrency market. Every economic entity that plans to invest or already invests in the cryptocurrency market is interested in answers to the number of questions: what are the reasons for the cryptocurrency coins prices fall and for the cryptocurrency market capitalization decrease during the crisis and depression; what are the reasons for future growth in the cryptocurrency market during the period of revival and elevation; which indicators "signal" the beginning of crisis / depression or revival /elevation periods in the cryptocurrency market. In this article, we will try to answer these questions.
Scientific research analysis. Although there is a significant interest in society to study the investing possibilities in cryptocurrency coins at various phases of the economic cycle, scientific economic research in this area is insufficient. The theoretical principles of the study of the average economic cycle phases are reflected in the scientific works of such scientists as S. V. Mocherny, O. O. Mamalui, O. A. Hrytsenko, L. V. Hryshchenko, G. Yu. Darnopyh and others.
The aim of the study. The purpose of scientific research is a theoretical analysis of the effective investment possibility in the cryptocurrency market in various phases of economic cycles to ensure the most likely positive economic effect. The realization of the goal involves determining the optimal timing for medium and long-term investment in cryptocurrency coins.
Research methodology and methods. The following special research methods were used: direct observation was carried out to collect the information about the Fed discount rate and the value of the Ether cryptocurrency during 26.02.2022 – 14.12.2022; applied information processing methods to develop tables of linear dependence of the Ether crypto coin value from the Fed's discount rate from 26.02.2022 to 14.12.2022; to determine the tightness of the relationship between the Ether cryptocurrency coin's value dynamics and the Fed's discount rate, a method of analytical work was used to calculate the correlation coefficient between the Ether cryptocurrency coin's value and the Fed's discount rate.
Results of the research. The cryptocurrency market, like any other market, is subject to cyclical fluctuations and all four phases of the economic cycle – crisis, depression, revival and elevation.
The cryptocurrency market actively reacts to military, political and economic events. The beginning of the crisis phase in the cryptocurrency market coincided with the beginning of the conventional Russian-Ukrainian war and the beginning of an active increase in the Federal Reserve System's discount rate as a mean of curbing inflation in the United States. The calculated value of the linear correlation coefficient r = – 0.807 indicates the presence of a close inverse relationship between the growth of the Fed's discount rate and the decrease in the value of the Ether cryptocurrency.
Despite the significant decrease in the cryptocurrency market capitalization and the decrease in the cryptocurrencies value in the phases of crisis and depression, there are significant prerequisites for the onset of revival and elevation phases. Therefore, in the phase of depression, it is advisable to make medium and long-term investments in crypto-assets.
Scientific novelty of the research results. Different phases of the average economic cycle in the cryptocurrency market in 2022 and the impact on the change and course of the phases of the economic cycle of the conventional Russian-Ukrainian conflict are considered. The phases of the economic cycle in the cryptocurrency market must be studied in order to effectively choose the most successful timing for cryptocurrency investment in the medium and long term.
Practical significance of the obtained research results. According to the author, medium- and long-term investing in cryptocurrency coins is most successful in the depression phase. The obtained results of this scientific economic research will be extremely useful for use by economic entities in the practical activity of cryptoinvesting.
The article contains: formulas: 3, fig. 1, table 1, ref. 10.