FORECASTING THE DYNAMICS OF BITCOIN BASED ON CRYPTOCURRENCY PRICE FORMATION FACTORS

Abstract

Cryptocurrencies have become one of the most relevant topics in recent financial and economic issues. Today, the main features of cryptocurrency are decentralization, ability to be considered as means of payment, high liquidity, absence of an issuer as any central authority, irreversibility of payments and transparency. The growth of cryptocurrencies among other world currencies allows them to be a highly profitable asset to invest in and stimulates the interest of new miners. However, there are some risks arising. Firstly, the risk related to governmental restriction and regulating laws about usage of cryptocurrency. Secondly, there is a risk of fraud and no opportunity to accuse those responsible due to the anonymity of users. And last but not least, high volatility of cryptomarket. Keywords: bitcoin exchange rate, cryptocurrency, financial index, currency pair, metal futures, correlation-regression analysis, forecast of bitcoin value dynamics.