An empirical study of how Bitcoin related incidents impact its price volatility

Abstract

Bitcoin, a fascinating phenomenon of crypto-technology, has emerged in financial markets as a potential alternative to standard fiat currencies. It represents unique sociotechnical
\necosystem working outside of any traditional markets, and its economy is still not well understood. Dynamics of Bitcoin price proves to be quite a controversial subject, but there is a strong indication that social factors mainly influence its economy.
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\nTechnical flaws and lack of any central authority issuing and controlling this digital currency make it vulnerable to abuse. It has been associated with controversy due to frequent incidents, namely hacks, theft, scam, and illicit use, which affected its ecosystem ever since it gained popularity.
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\nThis thesis adds to the discussion about social aspects of Bitcoin economy by analysing the changes in its price volatility in the context of incidents occurring in its
\necosystem. As empirically proven, those negative events have no impact on the fluctuations of Bitcoin price.