What is it about?
Cryptocurrency projects articulate their value propositions through whitepapers, making foundational claims about functionality, use cases, and technical capabilities. This study investigates whether these narrative claims align with empirically observed market behavior.
Featured Image
Photo by Erling Løken Andersen on Unsplash
Why is it important?
We interpret these findings as evidence that whitepaper narratives are systematically poor predictors of realized market factor structure, with implications for narrative economics, market efficiency, and investment analysis in cryptocurrency markets.
Perspectives
Results indicate weak alignment across all comparisons: claims-statistics (ϕ = 0.331, p = 0.757), claims-factors (ϕ = 0.091, p = 0.670), and statistics-factors (ϕ = 0.182, p = 0.067). Rank sensitivity analysis reveals alignment improves modestly with higher ranks (ϕ = 0.132 at rank 5) but remains weak. Tucker decomposition comparison yields similar results (ϕ = 0.070), confirming robustness to decomposition method. Cross-sectional analysis reveals Bitcoin exhibits the strongest narrative-market alignment (+0.025 impact), while DeFi tokens (AAVE, UNI, ENS) show the largest divergence (-0.057 to-0.062). Temporal analysis across six rolling windows demonstrates alignment stability (ϕ = 0.232 ± 0.023).
Masters Student & Researcher Murad Farzulla
King's College London
Read the Original
This page is a summary of: Do Whitepaper Claims Predict Market Behavior? — <i>Evidence from Cryptocurrency Factor Analysis</i>, January 2025, Elsevier,
DOI: 10.2139/ssrn.5918302.
You can read the full text:
Resources
Contributors
The following have contributed to this page
