What Does Crypto-currency Look Like? Gaining Insight into Bitcoin Phenomenon

Abstract

The present paper seeks to effectively address the following question: What Bitcoin looks like? To do so, we regress Bitcoin price on a number of variables (Bitcoin fundamentals recorded in the literature) by applying an ARDL Bounds Testing approach for daily data covering the period from December 2010 to June 2014. Our findings highlight the speculative nature of Bitcoin. We also provide insightful evidence that Bitcoin may be used for economic reasons but there is any sign of being a safe haven. By considering the Chinese trading bankruptcy and the closing of Road Silk by FBI, the contribution of users’ interest stills sharply dominant, indicating the robustness of our results.