Work detail

Virtual currencies in real economy: Bitcoin

Author: Mgr. Jiří Šafka
Year: 2014 - summer
Leaders: PhDr. Pavel Vacek Ph.D.
Consultants:
Work type: Economic Theory
Masters
Language: English
Pages: 86
Awards and prizes:
Link: https://is.cuni.cz/webapps/zzp/detail/138114/
Abstract: This paper examines the relationship between virtual currency, the Bitcoin, and the real economy. In the
first part the description of the term virtual currency is provided with special focus on Bitcoin. Also the
legal and taxation issues are discussed. In the main part the volatility of Bitcoin is inspected using
various models from Autoregressive heteroskedasticity models family. We found that the volatility of
Bitcoin differs significantly through time and that this relation is captured best by T-GARCH (1,1)
model. Finally the relationship between Bitcoin and real economy indicators is observed to be
inconsistent and mostly insignificant in time. Thus we conclude that the independency of Bitcoin cannot
be rejected.

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