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Ranking and Classification of Cryptocurrency Exchanges Using the Methods of a Multidimensional Comparative Analysis

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  • Kądziołka Kinga

    (Academy WSB, Dąbrowa Górnicza, Poland Cieplaka 1c, 41-300 Dąbrowa Górnicza)

Abstract

Research background: The multidimensional assessment of the attractiveness of cryptocurrency exchanges seems to be an important issue, because the risk of the collapse of such an exchange or its use for illegal purposes is higher than in the case of traditional exchanges. Purpose: The aim of the work is to create ranking and identify groups of cryptocurrency exchanges with a similar level of attractiveness. Research methodology: 13 different composite indicators were considered. Finally, one of them was chosen as a representative according to the similarity of the obtained rankings. Clustering methods were used to identify groups of exchanges with a similar level of the constructed measure. Result: The best according to the adopted criteria of rankings similarity was the taxonomic measure constructed using the standardized sum method with equal weights. Combining hierarchical clustering with the k-means algorithm allowed to improve the quality of clustering measured with the silhouette index. Novelty: The originality of the paper lies in the use of different methods of a multidimensional comparative analysis on the cryptocurrency market.

Suggested Citation

  • Kądziołka Kinga, 2021. "Ranking and Classification of Cryptocurrency Exchanges Using the Methods of a Multidimensional Comparative Analysis," Folia Oeconomica Stetinensia, Sciendo, vol. 21(2), pages 38-56, December.
    • Handle: RePEc:vrs:foeste:v:21:y:2021:i:2:p:38-56:n:9
    DOI: 10.2478/foli-2021-0015
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    More about this item

    Keywords

    cryptocurrency exchanges; composite indicator; hierarchical clustering; k-means; linear ordering; weighting schemes; investments attractiveness;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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