Determining the Factors of Bitcoin Price Volatility

Date

4-2023

Degree

Bachelor of Science in Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Luisito C. Abueg

Committee Member

Gideon P. Carnaje, Agham C. Cuevas

Abstract

The presence of electronic wallets, online banking, and virtual currencies in the present shows how the world’s technology constantly evolves regarding accessibility and security. One of the popular currencies right now is cryptocurrencies, which are part of virtual currencies. Bitcoin, the mother of all cryptocurrencies, has already been used by millions of people and thousands of companies as an investment or for financial transactions. However, different governments are still weary of it due to its high price volatility, which is why this study attempts to determine the factors that affect its volatility.

The study introduced Bitcoin’s background and history of its creator, and how it came about. Several studies regarding Bitcoin and its mechanisms were discussed, such as its characteristics of a fixed supply and its highly volatile price. From the different studies, researchers chose several factors and various methods to measure Bitcoin’s volatility. This study specifically tested the following factors: Demand for Information, Bitcoin Trade Volume, World Market Index, Trend of Acceptance, and Event effects. The study tested these factors through the distributed lag model, and different lag periods of factors were significant.

The results showed that determining the factors affecting Bitcoin’s price volatility can be achieved and that Bitcoin investors can minimize the risk of investing in Bitcoin by studying the said factors. Hopefully, with the increasing knowledge of Bitcoin on hand, governments start to officially recognize Bitcoin as a legal tender, such as in the case of the country El Salvador.

Language

English

LC Subject

Bitcoin

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2023 E2 P36

Notes

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Document Type

Thesis

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