Bitcoin as a monetary system: Examining attention and attendance

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en Huhtinen, Timo-Pekka 2014-08-06T08:38:18Z 2014-08-06T08:38:18Z 2014
dc.description.abstract OBJECTIVES OF THE STUDY: This thesis has three objectives. First, the past development of monetary systems is studied to see how Bitcoin is positioned as the forerunner of a new category. Second, the attitudes and expecta-tions of Finnish stakeholders are studied to recognize the general perception and future outlook for Bitcoin. Third, bitcoins are examined as an investment instrument by studying price drivers and the degree of predictability of future returns. DATA AND METHODOLOGY: The qualitative methods are based on a literature review and an interview study conducted with Finnish stakeholders from different financial institutions and Bitcoin start-ups. The quantitative methods consist of market sizing calculations, a regression analysis, and Granger tests. The regres-sions utilize novel variables network hashrate, network transactions, and bitcoin supply as explan-atory variables for bitcoin price. Also bitcoin price and Google Trends SVI are used as explanatory variables. The market sizing calculations are based on M2 monetary aggregates for USD, EUR, and JPY. FINDINGS OF THE STUDY: The thesis develops a categorization for decentralized cpytocurrencies that takes into account the main developments of the past monetary systems. The interview study reveals optimism for the technology behind Bitcoin and other decentralized systems, while all interviewees accept the un-certainty of Bitcoin survival. The stakeholders perceive the main challenges of Bitcoin to be tech-nological weaknesses, trust, and reputational issues. In terms of market sizing, it is clear that Bitcoin is not currently a serious threat to fiat currencies. Price driver analysis revealed a momen-tum effect in price returns, as well as an inflationary effect caused by the increasing supply. Also the network hashrate was found to forecast future bitcoin returns. The results from the Granger tests challenge the causality assumed in the regressions. en
dc.format.extent 110
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.title Bitcoin as a monetary system: Examining attention and attendance en
dc.type G2 Pro gradu, diplomityö fi Kauppakorkeakoulu fi School of Business en
dc.contributor.department Rahoituksen laitos fi
dc.contributor.department Department of Finance en
dc.subject.keyword cryptocurrencies
dc.subject.keyword blockchain
dc.subject.keyword virtual currencies
dc.subject.keyword regulation
dc.subject.keyword central banking
dc.subject.keyword monetary policy
dc.subject.keyword decentralization
dc.subject.keyword disintermediation
dc.subject.keyword monetary systems
dc.subject.keyword Google Trends
dc.subject.keyword hashrate
dc.subject.keyword Granger
dc.subject.keyword momentum
dc.subject.keyword inflation
dc.subject.keyword Mt.Gox
dc.subject.keyword gold
dc.subject.keyword cypherpunks
dc.subject.keyword cryptography
dc.subject.keyword free market
dc.subject.keyword intrinsic value
dc.identifier.urn URN:NBN:fi:aalto-201408062331
dc.type.dcmitype text en
dc.programme.major Finance en
dc.programme.major Rahoitus fi
dc.type.ontasot Master's thesis en
dc.type.ontasot Pro gradu tutkielma fi
dc.subject.helecon rahoitus
dc.subject.helecon financing
dc.subject.helecon rahatalous
dc.subject.helecon monetary economics
dc.subject.helecon internet
dc.subject.helecon internet
dc.subject.helecon raha
dc.subject.helecon money
dc.subject.helecon virtuaalitodellisuus
dc.subject.helecon virtual reality
dc.subject.helecon pankit
dc.subject.helecon banks
dc.subject.helecon rahapolitiikka
dc.subject.helecon monetary policy
dc.subject.helecon tietoyhteiskunta
dc.subject.helecon information society
dc.ethesisid 13626 2014-07-02
dc.location P1 I fi

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