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Bitcoin price as one of basic cryptocurrencies in relation to the basic stock market's indicators

Author

Listed:
  • Antonín Korauš

    (Academy of the Police Force in Bratislava, Slovakia)

  • Miroslav Gombár

    (University of Prešov, Slovakia)

  • Alena Vagaská

    (Technical University of Košice, Slovakia)

  • Radovan Bačík

    (University of Prešov, Slovakia)

  • Peter Korba

    (Technical University of Košice, Slovakia)

  • Filip Černák

    (University of Prešov, Slovakia)

Abstract

During 2020, factors such as the global pandemic, financial uncertainty and the US election saw an increase in the correlation between bitcoin and gold and the stock market. Both bitcoins and gold rose sharply during 2020, thanks to the relentless press of fiat money by governments and central banks that intend to keep their economies afloat as a result of the coronavirus pandemic. As digital gold, BTC appeals to the cashless Internet economy largely for its features, which include continuous price transparency and a lack of restrictions, disruptions or third-party oversight. The paper focuses on the analysis and identification of the relationship between the value of basic cryptocurrencies and gold price movements, as well as the research hypothesis that the value of the most known and used cryptocurrency bitcoin (BTC) increases with the rising price of gold - a special commodity that serves several functions of the world economy. This issue is currently gaining more and more attention also in context of risk management which is the identification, evaluation, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events or to maximize the realization of opportunities and mobile commerce in the aspect of the impact of modern technologies and mobile communication platforms on consumer behavior and consumer preferences. Innovatively, we have made our observations of the price of bitcoin in relation to price fluctuations in the gold markets in order to develop a predictive model for simulating the development of the price of bitcoin. The mathematical model was developed on the basis of statistical analysis of the observed data.

Suggested Citation

  • Antonín Korauš & Miroslav Gombár & Alena Vagaská & Radovan Bačík & Peter Korba & Filip Černák, 2021. "Bitcoin price as one of basic cryptocurrencies in relation to the basic stock market's indicators," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 9(2), pages 552-569, December.
    • Handle: RePEc:ssi:jouesi:v:9:y:2021:i:2:p:552-569
    DOI: 10.9770/jesi.2021.9.2(36)
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    References listed on IDEAS

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    1. Symitsi, Efthymia & Chalvatzis, Konstantinos J., 2019. "The economic value of Bitcoin: A portfolio analysis of currencies, gold, oil and stocks," Research in International Business and Finance, Elsevier, vol. 48(C), pages 97-110.
    2. Marie Briere & Kim Oosterlinck & Ariane Szafarz, 2015. "Virtual Currency, Tangible Return: Portfolio Diversification with Bitcoins," Post-Print CEB, ULB -- Universite Libre de Bruxelles, vol. 16(6), pages 365-373.
    3. Bouri, Elie & Gupta, Rangan, 2021. "Predicting Bitcoin returns: Comparing the roles of newspaper- and internet search-based measures of uncertainty," Finance Research Letters, Elsevier, vol. 38(C).
    4. David Yermack, 2013. "Is Bitcoin a Real Currency? An economic appraisal," NBER Working Papers 19747, National Bureau of Economic Research, Inc.
    5. Jakub Bartos, 2015. "Does Bitcoin follow the hypothesis of efficient market?," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 4(2), pages 10-23, June.
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    Cited by:

    1. Alena Vagaská & Miroslav Gombár & Antonín Korauš, 2022. "Mathematical Modeling and Nonlinear Optimization in Determining the Minimum Risk of Legalization of Income from Criminal Activities in the Context of EU Member Countries," Mathematics, MDPI, vol. 10(24), pages 1-25, December.
    2. Iveta Šimberová & Antonín Korauš & David Schüller & Lenka Širáňová & Jarmila Straková & Jan Váchal, 2022. "Threats and Opportunities in Digital Transformation in SMEs from the Perspective of Sustainability: A Case Study in the Czech Republic," Sustainability, MDPI, vol. 14(6), pages 1, March.

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    More about this item

    Keywords

    bitcoin; Bitcoin price; gold price; cryptocurrency; virtual money; financial risk; risk management; electronic and mobile commerce; modern technologies; consumer behavior; consumer preferences;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • F39 - International Economics - - International Finance - - - Other
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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