The economics of BitCoin price formation
Open accessAbstract
This is the first article that studies BitCoin price formation by considering both the traditional determinants of currency price, e.g., market forces of supply and demand, and digital currencies specific factors, e.g., BitCoin attractiveness for investors and users. The conceptual framework is based on the Barro (1979) model, from which we derive testable hypotheses. Using daily data for five years (2009–2015) and applying time-series analytical mechanisms, we find that market forces and BitCoin attractiveness for investors and users have a significant impact on BitCoin price but with variation over time. Our estimates do not support previous findings that macro-financial developments are driving BitCoin price in the long run.
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Bitcoin's fundamental feature could be the halving effect, occurring every four years; these investigations view this event as a structural change and a potential source of price performance.
“Therefore, Bitcoin's fundamental feature could be the halving effect, occurring every four years. These investigations view this event as a structural change and a potential source of price performance, based on historical data as well as other market-specific influencing factors (Ciaian et al. 2015; Meynkhard 2019; Wang et al. 2020).”
From An Empirical Examination of Bitcoin’s Halving Effects: Assessing Cryptocurrency Sustainability within the Landscape of Financial Technologies (2024) · cites this paper as Ciaian et al. 2015
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“These investigations view this event as a structural change and a potential source of price performance, based on historical data as well as other market-specific influencing factors (Ciaian et al. 2015; Meynkhard 2019; Wang et al. 2020).”
BackgroundFollowness of Altcoins in the Dominance of Bitcoin: A Phase Analysis
Kulal, A. (2021) · Macro Management & Public Policies · doi:10.30564/mmpp.v3i3.3589 · Cited by 10 · see citing works
“The increasing popularity of Bitcoin gained not only the attention of Media and Investors but also researchers on the area of Price formation ([6,15]), portfolio implications [10], ([16]), blockchain technology [17,18] Market efficiency ([19]), Asymmetric relationship with Altcoins [7] legal issues [20] and risk-retur…”
Background
- Authors
- Ciaian, P., Rajcaniova, M., & Kancs, D.
- Affiliations
- Joint Research Center (ES)
- Corresponding author
- Kancs, d’Artis
- Venue
- Applied Economics
- Publisher
- Informa UK Limited
- Published
- 2015-11-13
- Volume
- 48
- Issue
- 19
- Pages
- 1799-1815
- ISSN
- 0003-6846 (ISSN-L)
- 1466-4283
- OpenAlex
- W1798106456
- Cited by
- 1,004
- References
- 22
- Citations by year
- 2026: 47 · 2025: 55 · 2024: 102 · 2023: 123 · 2022: 140 · 2021: 147 · 2020: 126 · 2019: 138 · 2018: 79 · 2017: 31 · 2016: 9 · 2015: 5 · 2014: 2
- FWCI
- 111.13
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- cc-by-nc-nd
- Locations
- Applied Economics (publishedVersion, cc-by-nc-nd)
- RePEc: Research Papers in Economics (submittedVersion)
- Joint Research Centre (European Commission) (submittedVersion)
- Funders
- Slovak Ministry of Education (APVV-0894-11 and VEGA1/0830/13)
- Topics
- Physical Sciences › Computer Science › Information Systems › Blockchain Technology Applications and Security
- Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Market Dynamics and Volatility
- Keywords
- Bitcoin, digital currency, supply and demand, investor attractiveness, Barro model
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