Bitcoin as a monetary system: Examining attention and attendance

dc.contributorAalto-yliopistofi
dc.contributorAalto Universityen
dc.contributor.authorHuhtinen, Timo-Pekka
dc.contributor.departmentRahoituksen laitosfi
dc.contributor.departmentDepartment of Financeen
dc.contributor.schoolKauppakorkeakoulufi
dc.contributor.schoolSchool of Businessen
dc.date.accessioned2014-08-06T08:38:18Z
dc.date.available2014-08-06T08:38:18Z
dc.date.dateaccepted2014-07-02
dc.date.issued2014
dc.description.abstractOBJECTIVES 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.ethesisid13626
dc.format.extent110
dc.format.mimetypeapplication/pdfen
dc.identifier.urihttps://aaltodoc.aalto.fi/handle/123456789/13667
dc.identifier.urnURN:NBN:fi:aalto-201408062331
dc.language.isoenen
dc.locationP1 Ifi
dc.programme.majorFinanceen
dc.programme.majorRahoitusfi
dc.subject.heleconrahoitus
dc.subject.heleconfinancing
dc.subject.heleconrahatalous
dc.subject.heleconmonetary economics
dc.subject.heleconinternet
dc.subject.heleconinternet
dc.subject.heleconraha
dc.subject.heleconmoney
dc.subject.heleconvirtuaalitodellisuus
dc.subject.heleconvirtual reality
dc.subject.heleconpankit
dc.subject.heleconbanks
dc.subject.heleconrahapolitiikka
dc.subject.heleconmonetary policy
dc.subject.helecontietoyhteiskunta
dc.subject.heleconinformation society
dc.subject.keywordcryptocurrencies
dc.subject.keywordblockchain
dc.subject.keywordvirtual currencies
dc.subject.keywordregulation
dc.subject.keywordcentral banking
dc.subject.keywordmonetary policy
dc.subject.keyworddecentralization
dc.subject.keyworddisintermediation
dc.subject.keywordmonetary systems
dc.subject.keywordGoogle Trends
dc.subject.keywordhashrate
dc.subject.keywordGranger
dc.subject.keywordmomentum
dc.subject.keywordinflation
dc.subject.keywordMt.Gox
dc.subject.keywordgold
dc.subject.keywordcypherpunks
dc.subject.keywordcryptography
dc.subject.keywordfree market
dc.subject.keywordintrinsic value
dc.titleBitcoin as a monetary system: Examining attention and attendanceen
dc.typeG2 Pro gradu, diplomityöfi
dc.type.dcmitypetexten
dc.type.ontasotMaster's thesisen
dc.type.ontasotPro gradu tutkielmafi
local.aalto.idthes13626
local.aalto.openaccessyes
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