Global and local drivers of Bitcoin trading vis-à-vis fiat currencies

Paola Di Casola, Maurizio Michael Habib and David Tercero-Lucas

Journal of International Money and Finance, 2025, vol. 158, issue C

Abstract: We analyse global and local drivers of Bitcoin transactions against 45 fiat currencies in the largest peer-to-peer crypto exchanges. Global factors, such as momentum in the crypto-asset market or financial market volatility, do matter for Bitcoin trading. There is evidence of a global crypto cycle driven by speculative motives. Trading across currencies and users around the world moves in tandem with fluctuations in the Bitcoin price. Crypto shocks and global risk shocks are behind this cyclical comovement. Crucially, Bitcoin seems to also offer utility benefits in emerging and developing economies, since trading increases after idiosyncratic, currency-specific shocks that depreciate the currency. Local projections analysis and case studies confirm this important link between exchange rate instability and Bitcoin transactions.

Keywords: Digital currencies; Bitcoin; Peer-to-peer exchanges; Exchange rates; Emerging markets (search for similar items in EconPapers)
JEL-codes: E42 F21 F24 F32 F38 G15 O33 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0261560625001408
Full text for ScienceDirect subscribers only

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:eee:jimfin:v:158:y:2025:i:c:s0261560625001408

DOI: 10.1016/j.jimonfin.2025.103405

Access Statistics for this article

Journal of International Money and Finance is currently edited by J. R. Lothian

More articles in Journal of International Money and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().