Prospective Empirical Study on the Determinants of Bitcoin Price Formation (Case Study on Morocco)

Abstract

Despite being illegal in Morocco, bitcoin has gained great popularity in Morocco. However, in recent months, the Moroccan monetary authorities have set up two commissions to deal with crypto assets. The purpose of these commissions was to monitor international financial trends (in particular crypto assets). The current work will put forward a prospective study on the determinants that forms the price of bitcoin in Morocco, provided that the Moroccan monetary authorities would decide the legalization of the use of crypto assets. In an ARDL approach, an econometric model is applied to variables that reflect, not only all the factors related to the traditional currency, but also to variables that reflect specific factors to bitcoin over an eight-years period. This prospective study has highlighted that the frequency of bitcoin search on Google Trend, the number of bitcoins in circulation and the exchange rate between the Dollar and the Moroccan Dirham represent the main indicators that explain the formation of the price of bitcoin in the national territory.