Introduction

What is Algorand?

Algorand (ALGO) is a blockchain platform and cryptocurrency designed to function like a major payments processor. ALGO, the native coin of the Algorand platform, is used to secure the platform and reward the platform's operators. The Algorand blockchain offers immediate transaction finality, without the risk of forking or uncertainty, based on its pure proof-of-stake (PPoS) consensus algorithm. Once created, each new block remains on the chain indefinitely, thus ensuring that all transactions in this blockchain remain final.

Correlation

Correlation is the degree to which the prices of different assets move together. If the prices move in a similar proportion and in the same direction, they have a high correlation. If they move in opposite directions, they have a high negative correlation

Methodology

We are looking to see whether the price of the ALGO toke is more correlated with the crypto market or the performance of the Algorand Blockchain. To figure this out we are going to collect the following metrics:

• BTC, ETH, ALGO price over time

• ALGO price correlation with ETH and BTC

• Daily ALGO Transactions

• ALGO price / transactions correlations

Algorand Price Correlation Metrics

Observations

Since November of 2022 the price of ALGO has been decreasing. In the same time period the Daily Number of Algorand transaction have gone down 50%. Additionally The price of BTC and ETH have been declining Since November 2021.

Conclusion

Since November 2021 the price of BTC has been much more correlated to the price of ALGO than the number of transactions on the algorand Network. In this same time period the price of algorand has dropped 85%. This data shows that the large drop in price of the ALGO token is more correlated to the state of the market as a whole than the performance of the network in the past 8 months.