The Impact of Geopolitical Risks on Bitcoin Volume Growth: Evidence from a Panel Data Analysis

TL;DR

This study examines how geopolitical risks influence Bitcoin's trading volume growth across multiple countries, revealing a significant positive relationship especially in developing nations, supported by robust empirical analysis.

Contribution

It introduces new panel data analysis across 33 countries to explore the impact of geopolitical risks on Bitcoin volume growth, highlighting the role of GPR in cryptocurrency markets.

Findings

GPR positively affects Bitcoin volume growth.

The impact is stronger in developing countries.

Results are robust across various checks.

Abstract

This paper investigates the relationship between geopolitical risks (GPR) and the growth rate of Bitcoin (BTC) volume. Our analysis utilizes dynamic panel data from 33 individual countries and the European economic region. Empirical results demonstrate that GPR has a significant positive impact on BTC volume growth, particularly in developing countries. Our results are confirmed by several robustness checks, like Lagged IV, and volatility check among others. Our study offers a new perspective on BTC, as the novelty of the data used helps us understand the dynamics of BTC volume.