The network effect, measured by users’ adoption, is considered an important driver of cryptocurrency market dynamics. This study examines the role of adoption timing in cryptocurrency markets by decomposing total adoption into two components: innovators (early adopters) and imitators (late adopters). We find that the innovators’ component is the primary driver of the association between user adoption and cryptocurrency returns, both in-sample and out-of-sample. Next, we show that innovators’ adoption improves price efficiency, while imitators’ adoption contributes to noisier prices. Furthermore, we demonstrate that the adoption model captures significant cryptocurrency market phenomena, such as herding behaviour, more effectively, making it better suited for forecasting models in cryptocurrency pricing. These results suggest that our methodology for linking early and late adopters to market dynamics can be applied to various domains, offering a framework for future research at the intersection of operational research and financial markets.

中文翻译：

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加密货币的采用模式


以用户采用率衡量的网络效应被认为是加密货币市场动态的重要驱动力。本研究通过将总采用率分解为两个部分来考察采用时间在加密货币市场中的作用：创新者（早期采用者）和模仿者（后期采用者）。我们发现，创新者成分是用户采用与加密货币回报之间关联的主要驱动因素，无论是样本内还是样本外。接下来，我们表明创新者的采用提高了价格效率，而模仿者的采用导致了更嘈杂的价格。此外，我们证明采用模型更有效地捕捉了重要的加密货币市场现象，例如羊群行为，使其更适合预测加密货币定价中的模型。这些结果表明，我们将早期和晚期采用者与市场动态联系起来的方法可以应用于各个领域，为运筹学和金融市场交叉点的未来研究提供框架。