Testing the Weak Form of Efficiency of Cryptocurrencies : A Case Study of Bitcoin and Litecoin

This study examines the weak form of efficiency of the exchange rate of cryptocurrencies against US Dollar. The study is based on the exchange rate of Bitcoin and Litecoin against US Dollar from 2013 to 2017. The data is tested for heteroscedasticity, and the efficiency of these coin market is analysed using unit root and stationary tests such as Augmented Dickey Fuller (ADF) test, Philips Perron (PP) test and Kwiatkowski Phillips Schmidt Shin (KPSS) tests. The results of the study reveal that the Bitcoin and Litecoin exchange rate exhibit a random walk. Speculation helps for the rapid growth of these currency markets. It is advisable for the investors to invest for short term to get higher returns rather than for the long term. Investment in cryptocurrencies involves market shocks due to its unpredictable nature