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Spontaneous order in cryptocurrency markets: Crash dynamics and complexity–entropy causality plane

Author

Listed:
  • Bui, Huy Quoc
  • Schinckus, Christophe
  • Al-Jaifi, Hamdan
  • Lim, Boon-Keong

Abstract

This study examines the dynamic evolution of spontaneous order in cryptocurrency markets using the Complexity–Entropy Causality Plane (CECP) methodology. By analyzing closing price data from seven major cryptocurrencies between 2017 and 2025, we find that although these assets generally exhibit behavior consistent with a random walk, a clear bifurcation emerges. Newer and less established cryptocurrencies—such as DOGE, ADA, and BNB—display higher complexity and shift toward chaotic regimes, while BTC, XRP, ETH, and TRX maintain lower complexity and greater randomness, suggesting higher informational efficiency. Additionally, the analysis reveals distinct disorder-to-order transitions preceding several major market downturns, indicating that spontaneous order may function as an early warning signal of systemic stress.

Suggested Citation

  • Bui, Huy Quoc & Schinckus, Christophe & Al-Jaifi, Hamdan & Lim, Boon-Keong, 2025. "Spontaneous order in cryptocurrency markets: Crash dynamics and complexity–entropy causality plane," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 680(C).
    • Handle: RePEc:eee:phsmap:v:680:y:2025:i:c:s0378437125007022
    DOI: 10.1016/j.physa.2025.131050
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