Bitcoin Price Associations with Political Polarization, Digital Authoritarianism, Trade Protectionism, Deglobalization, and Language Entropy

Abstract

This study investigates the socio-political and economic factors influencing Bitcoin prices, focusing on political polarization, protests, digital authoritarianism, trade perfectionism, deglobalization, and language entropy. Using annual data from 2011 to 2022, we find significant positive correlations between Bitcoin prices and these variables. We propose theoretical explanations for these correlations suggesting that Bitcoin’s decentralized nature and independence from traditional financial systems make it an attractive hedge against instability and a tool for financial autonomy in a changing global environment. The study also highlights the need for further research to explore the casual mechanisms underlying these relationships and examine other cryptocurrencies’ role in these dynamics.