Next Article in Journal
Forecast Combinations for Structural Breaks in Volatility: Evidence from BRICS Countries
Next Article in Special Issue
Blockchain-Based ICOs: Pure Hype or the Dawn of a New Era of Startup Financing?
Previous Article in Journal
Market Reactions to Supply Chain Management Excellence
Previous Article in Special Issue
Can Bitcoin Replace Gold in an Investment Portfolio?
Article Menu

Export Article

Open AccessArticle
J. Risk Financial Manag. 2018, 11(4), 63; https://doi.org/10.3390/jrfm11040063

An Analysis of Bitcoin’s Price Dynamics

1
NTNU Business School, Norwegian University of Science and Technology, 7491 Trondheim, Norway
2
Nord University Business School, Nord University, 8049 Bodø, Norway
*
Author to whom correspondence should be addressed.
Received: 20 September 2018 / Revised: 8 October 2018 / Accepted: 11 October 2018 / Published: 15 October 2018
(This article belongs to the Special Issue Alternative Assets and Cryptocurrencies)
Full-Text   |   PDF [2186 KB, uploaded 15 October 2018]   |  

Abstract

This paper aims to enhance the understanding of which factors affect the price development of Bitcoin in order for investors to make sound investment decisions. Previous literature has covered only a small extent of the highly volatile period during the last months of 2017 and the beginning of 2018. To examine the potential price drivers, we use the Autoregressive Distributed Lag and Generalized Autoregressive Conditional Heteroscedasticity approach. Our study identifies the technological factor Hashrate as irrelevant for modeling Bitcoin price dynamics. This irrelevance is due to the underlying code that makes the supply of Bitcoins deterministic, and it stands in contrast to previous literature that has included Hashrate as a crucial independent variable. Moreover, the empirical findings indicate that the price of Bitcoin is affected by returns on the S&P 500 and Google searches, showing consistency with results from previous literature. In contrast to previous literature, we find the CBOE volatility index (VIX), oil, gold, and Bitcoin transaction volume to be insignificant. View Full-Text
Keywords: Bitcoin; cryptocurrency; Hashrate Bitcoin; cryptocurrency; Hashrate
Figures

Graphical abstract

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
SciFeed

Share & Cite This Article

MDPI and ACS Style

Kjærland, F.; Khazal, A.; Krogstad, E.A.; Nordstrøm, F.B.G.; Oust, A. An Analysis of Bitcoin’s Price Dynamics. J. Risk Financial Manag. 2018, 11, 63.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics

1

Comments

[Return to top]
J. Risk Financial Manag. EISSN 1911-8074 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top