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Predicting Zombie Cryptocurrency Assets Using Machine Learning Models

by CryptoDataDownload


The Study and Models That Work
Academics published a research study that used machine learning to predict which cryptocurrency assets with at least 210 days of trading history would become "zombie" assets over the next 28 day period. Zombie assets are defined as assets that "have not been listed on an exchange for up to a month, even if not official withdrawn from the market." The timeframe used in the study was 2015 to the end of 2022, so it definitely covered a huge boom period in the cryptocurrency markets. Some machine learning models performed better than others... in this case, a Random Forest model scored the best (with an 84% accuracy rate), and it was closely followed by XGB "extreme gradient boost".... It is no surprise to see XGB on this list as it seems to excel at many prediction use cases.

Useful Predictive Features
The next big important question is: what sort of features or predictors were the models using to be able to determine such a high accuracy rate? According to the study, the minimum/maximum trading volumes and median returns from previous periods were the most predictive. "Simple" models, especially those with fewer features, were found to generally perform better than more complex models.

Unimportant Predictive Features
In this study, these categorical features did not increase predictive power of the model and did not show significance in this prediction... You will not likely be surprised at that result when you read what the predictors are, but definitely a very creative feature prediction set used by the research team.
  • What is the category of the cryptocurrency symbol?
  • Does the coin have a related Twitter (X) account?
  • Is the token mineable?


    • Bedowska-Sojka, Barbara and Wojcik, Piotr and Pele, Daniel Traian, Early Warning Systems for Cryptocurrency Markets: Predicting 'Zombie' Assets Using Machine Learning




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