Combining Financial Technology Analysis to Study the Development Trend of Bitcoin Using ARMA Models

Jiatong Wu

Chapter 13 in Internet Finance and Digital Economy:Advances in Digital Economy and Data Analysis Technology, 2023, pp 161-171 from World Scientific Publishing Co. Pte. Ltd.

Abstract: In financial markets, all investors are concerned about the price and direction of the purchased asset. In recent years, in addition to investing in industrial assets, such as real estate and the stock market, some investors have put their spare money into virtual digital currencies such as the Bitcoin market in hopes of obtaining high returns as a form of online finance. The price of Bitcoin has changed dramatically over the past decade since the concept was first proposed in 2008. This paper discusses the advantages and risks of Bitcoin from the perspective of financial technology and argues that the skyrocketing prices of both are due to scarce supply, excess liquidity, and the formation of financial markets. This paper draws conclusions based on data analysis using the ARMA Models, as well as an understanding of Bitcoin. Although Bitcoin’s high price volatility may interfere with existing monetary policies and energy consumption confirmations, it also has advantages such as non-inflation, technical security, and facilitating blockchain development.

Keywords: Internet Economy; Online Finance; Financial Engineering; Big Data; Blockchain; Supply Chain; E-commerce (search for similar items in EconPapers)
JEL-codes: G2 O33 (search for similar items in EconPapers)
Date: 2023
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