EconPapers    
Economics at your fingertips  
 

The digital agenda of virtual currencies: Can BitCoin become a global currency?

Pavel Ciaian, Miroslava Rajcaniova () and d'Artis Kancs

Information Systems and e-Business Management, 2016, vol. 14, issue 4, No 8, 883-919

Abstract: Abstract This paper identifies and analyzes BitCoin features which may facilitate BitCoin to become a global currency, as well as characteristics which may impede the use of BitCoin as a medium of exchange, a unit of account and a store of value, and compares BitCoin with standard currencies with respect to the main functions of money. Among all analyzed BitCoin features, the extreme price volatility stands out most clearly compared to standard currencies. In order to understand the reasons for such extreme price volatility, we attempt to identify drivers of BitCoin price formation and estimate their importance econometrically. We apply time-series analytical mechanisms to daily data for the 2009–2014 period. Our estimation results suggest that BitCoin attractiveness indicators are the strongest drivers of BitCoin price followed by market forces. In contrast, macro-financial developments do not determine BitCoin price in the long-run. Our findings suggest that as long as BitCoin price will be mainly driven by speculative investments, BitCoin will not be able to compete with standard currencies.

Keywords: BitCoin; Virtual currency; Exchange rate; Supply and demand; Financial indicators; Attention-driven investment (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10257-016-0304-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: The Digital Agenda of Virtual Currencies. Can BitCoin Become a Global Currency? (2015) Downloads
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:spr:infsem:v:14:y:2016:i:4:d:10.1007_s10257-016-0304-0

Ordering information: This journal article can be ordered from
http://www.springer. ... ystems/journal/10257

Access Statistics for this article

Information Systems and e-Business Management is currently edited by Jörg Becker and Michael J. Shaw

More articles in Information Systems and e-Business Management from Springer
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-07-16
Handle: RePEc:spr:infsem:v:14:y:2016:i:4:d:10.1007_s10257-016-0304-0