A comparative analysis of cryptocurrency returns and inflation in India

Abstract

Purpose: The rapidly growing cryptocurrency market presents a potentially lucrative avenue for investment in a sector experiencing increasing demand. This study aimed to investigate the volatility of four prominent cryptocurrencies - Bitcoin, Ethereum, Tether, and BNB - and assess their impact on inflation for Indian investors. Methodology: Data on the four chosen cryptocurrencies was collected and analyzed to assess volatility margins and trading volumes during specific periods. Microsoft Excel functions were used for data retrieval, while Bollinger Bands were generated using the open-source R statistical software (version 4.4). Findings: Construction of Bollinger Bands with R software and data analysis using Excel revealed significant volatility in Bitcoin and Ethereum prices. Conversely, Tether and BNB demonstrated relatively low volatility. Practical Implications: The findings of this research offer valuable insights for academics, current and potential investors, and policymakers navigating the evolving cryptocurrency market. Originality: This study uniquely focuses on identifying cryptocurrencies with lower volatility, addressing a crucial concern for investors beyond mere utility. It stands out as a rare investigation specifically aimed at pinpointing safer cryptocurrency options for future investment.