Mergers and acquisitions amongst top fundamental crypto price movers – Analytics platform
- The effects of exchange listings on an asset’s price aren’t sustainable in the long-term.
- Mergers and acquisitions tend to have a long-term positive impact on the cryptocurrency’s valuation.
The Tie, a cryptocurrency analytics platform, took to Twitter to reveal the findings of their month-long study. The study's main subject matter was to analyze the effects of fundamental news on a cryptocurrency’s price movement. According to their research, certain announcements tend to procure more responses than others. In the image below, the announcements are ordered left-to-right in increasing order of positive effect on price.
Effects of listing and partnerships on price
Logically, listings should have a positive effect on a digital asset’s price since it increases demand. Although listing and partnerships have an immediate positive influence, it’s not sustainable. According to The Tie’s research, the effects of a Listing or Partnership tends to wear off within a week. However, Mergers and Acquisitions tend to have positive effects that extend well beyond.
Why is a listing’s effect unsustainable?
A new listing has a negligible impact on a cryptocurrency’s price since it’s already listed on several other exchanges. However, if that weren’t the case and the asset gets listed on a large exchange, then there could be a short-term positive implication on the asset’s price. To understand this, The Tie cites the example of Aragon (ANT).
On August 12, ANT was first listed on OKEx and rose from $4.34 to $5.38 in just two hours. Less than 24 hours later, ANT got listed on Huobi and Binance and shot up by 164% and reached a high of $11.45. However, three months later, ANT dropped below its pre-listing value.
The effects of mergers and acquisitions
On the other hand, mergers and acquisitions can have a long-term positive implication on the asset’s price, showing a staggering 90% chance of positive return after a week. Such a high return likely occurs since mergers and acquisition-related news are often tightly guarded secrets and add a lot of value to the ecosystem. For example, FTX’s acquisition of Blockfolio added a large number of users to FTX. Just a week after this acquisition, FTX’s native token FTT rose by 33%.
Author
Rajarshi Mitra
Independent Analyst
Rajarshi entered the blockchain space in 2016. He is a blockchain researcher who has worked for Blockgeeks and has done research work for several ICOs. He gets regularly invited to give talks on the blockchain technology and cryptocurrencies.
