Factors affecting Cryptocurrency Prices: Evidence from Ethereum

Cryptocurrency market has a potential growth since Bitcoin emerged as one of the commodity investment in Indonesia. Besides Bitcoin, there is another altcoin which rapidly developing and dominating the cryptocurrency market, Ethereum. Therefore, this study aims to analyze the factors that affect Ethereum prices through macroeconomic aspects, such as EUR/USD exchange rate and the price of gold, as well as Bitcoin and other altcoins prices in the cryptocurrency market. The time series data consists of weekly data of all variables will be utilized during the 2016-2018 period. This study will conduct an empirical analysis by using the Autoregressive Distributed Lag (ARDL) test model. The result found that only in the short term, EUR/USD affects the Ethereum prices, while the price of gold do not show any effect on Ethereum prices. Moreover, Bitcoin and 2 alt-coins (Litecoin, and Monero) affect significantly the Ethereum prices. Nevertheless, Ripple and Stellar do not show significant effect on Ethereum prices.