The Economics of BitCoin Price Formation
Pavel Ciaian, Miroslava Rajcaniova, d'Artis Kancs
TL;DR
This study investigates how supply-demand fundamentals and investor attractiveness influence Bitcoin prices, finding significant impacts from the former but not from macro-financial developments, based on time-series analysis of data from 2009-2014.
Contribution
It provides new empirical evidence on the determinants of Bitcoin prices, emphasizing the importance of market fundamentals and investor interest over macro-financial factors.
Findings
Bitcoin fundamentals significantly impact price
Investor attractiveness influences Bitcoin price
Macro-financial developments are not significant drivers
Abstract
This paper analyses the relationship between BitCoin price and supply-demand fundamentals of BitCoin, global macro-financial indicators and BitCoin attractiveness for investors. Using daily data for the period 2009-2014 and applying time-series analytical mechanisms, we find that BitCoin market fundamentals and BitCoin attractiveness for investors have a significant impact on BitCoin price. Our estimates do not support previous findings that the macro-financial developments are driving BitCoin price.
Peer Reviews
No public reviews on file for this paper yet. If you reviewed it on a platform where reviews are public (OpenReview, ICLR, NeurIPS, ICML), you can paste yours below so the community can read it here.
Videos
No videos yet. Explain this paper in a talk, walkthrough, or lecture? Add one.
Taxonomy
TopicsBlockchain Technology Applications and Security · FinTech, Crowdfunding, Digital Finance · Financial Markets and Investment Strategies