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The Economics of BitCoin Price Formation

Author

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  • Pavel Ciaian
  • Miroslava Rajcaniova
  • d'Artis Kancs

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.

Suggested Citation

  • Pavel Ciaian & Miroslava Rajcaniova & d'Artis Kancs, 2014. "The Economics of BitCoin Price Formation," Papers 1405.4498, arXiv.org.
  • Handle: RePEc:arx:papers:1405.4498
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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