Macroeconomics determinants of bitcoin volatility in the cryptocurrency market in United States of America / Muhammad Hakimie Izat Rosle

• Main Author: Rosle, Muhammad Hakimie Izat
• Format: Thesis
• Language: English
• Published: 2022
• Subjects: Macroeconomics; Money
• Online Access: https://ir.uitm.edu.my/id/eprint/104537/1/104537.pdf; https://ir.uitm.edu.my/id/eprint/104537/

Bitcoin is a virtual currency designed to act as money and a form of payment outside the control of any person, group, or entity, thus removing the need for third-party involvement in financial transactions. When large fluctuations in macroeconomics occur, digital currencies can attract inflows of safe-haven funds due to their independence from sovereign credit, anonymous transactions and network-wide transactions. Many scholars worldwide have begun exploring blockchain technology's hedging properties with the current macroeconomic uncertainty. Several studies find that bitcoin demonstrates a weak correlation with traditional financial assets and thus believe that bitcoin can be used to diversify risk. Due to its many similarities to gold, bitcoin may become a safe-haven asset under certain extreme market conditions. However, recent news shows a significant relationship between Bitcoin and the macroeconomy. Using the static panel data analysis with a regression model, this study whether Bitcoins monthly price is affected by the United States of America's macroeconomy. The selected macroeconomics studied are gross domestic product, Consumer price index, Effective Federal Funds Rate, unemployment, and The Standard and Poor's 500 with monthly data from October 10, 2014, until January 5, 2022. The results depict mixed findings where all macroeconomics will be significant toward the Bitcoin price.