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Analysis of factors which affect bitcoin returns : what can explain the fluctations in bitcoin returns?

Heuver, Damy (2019) Analysis of factors which affect bitcoin returns : what can explain the fluctations in bitcoin returns?

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Abstract:In the last years, bitcoin created a lot of attention among investors. Despite the attention there is still greater knowledge necessary to explain the factors that influence the bitcoin returns. Therefore, this Master Thesis explains how bitcoin can be characterized and examines the theories and factors that influence fluctuations in bitcoin returns. The factors examined are energy prices, S&P 500 returns, search volume on Google, new post on bitcointalk.org, supply growth, volume growth, inflation rates and interest rates. The factors are linked to various theories including the cost-based pricing theory, demand and supply theory and technical analysis. Most factors are linked to demand and supply theory. Energy price is linked to the cost-based pricing theory and volume growth to technical analysis. The results show that volume growth, S&P 500 have a significant and positive impact on bitcoin returns and supply growth a significant negative impact on bitcoin returns. Therefore, the demand and supply theory and technical analysis are applicable to bitcoin returns. The results of this study show that bitcoin has similarities and differences with an asset, commodity and currency. Therefore bitcoin is categorized as a hybrid because it has characteristics of a commodity, currency and asset.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics, 85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/79419
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