Studying forward looking bubbles in Bitcoin/USD exchange rates

Abstract

Although Bitcoin is a relatively new subject in Economics, contributions in this topic are growing very fast. Several papers evidenced a bubble behaviour in exchange rates between Bitcoin and traditional currencies. In this paper we explore and give validation to such conjecture, proving also that the bubble effect is due to confidence in Bitcoin future values. This means that Bitcoin price/exchange rate is influenced both by future and past events, but that the bubble behaviour is strictly connected to trust on the future of the Bitcoin system.