On- and off-chain demand and supply drivers of Bitcoin price

Pavel Ciaian, d'Artis Kancs and Miroslava Rajcaniova

Papers from arXiv.org

Abstract: Around three quarters of Bitcoin transactions take place off-chain. Despite their significance, the vast majority of the empirical literature on cryptocurrencies focuses on on-chain transactions. This paper presents one of the first analysis of both on- and off-chain demand- and supply-side factors. Two hypotheses relating on-chain and off-chain demand and supply drivers to the Bitcoin price are tested in an ARDL model with daily data from 2019 to 2024. Our estimates document the differential contributions of on-chain and off-chain drivers on the Bitcoin price. Off-chain demand pressures have a significant impact on the Bitcoin price in the long-run. In the short-run, both demand and supply drivers significantly affect the Bitcoin price. Regarding transactions on the blockchain, only on-chain demand pressures are statistically significant - both in the long- and short-run. These findings confirm the dual nature of the Bitcoin price dynamics, where also market fundamentals affect the Bitcoin price in addition to speculative drivers. Bitcoin whale trading has less significant impact on price in the long-run, while is more pronounced contemporaneously and one-period lag.

Date: 2026-02
References: Add references at CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2602.08429 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2602.08429

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().