FINANCIAL VIABILITY OF CRYPTOCURRENCIES IN PAKISTAN

Yıl 2022, Cilt: 6 Sayı: 11, 1 - 21, 25.02.2022

Zahra Sheıkh

https://doi.org/10.30520/tjsosci.988564

Cited By: 1

Öz

The globally acknowledged accelerating crypto hype has put a lot of work on researchers and analysts. This new marvel of digital currencies requires a lot of attention, for it to become conventional worldwide. Virtual coins or cryptographic forms of money utilize encryption framework, so called the Block Chain technology, that manage the formation and supply of coins and exchanges must be recognized from a financial examination point of view. Subsequently, it is essential to inspect which social, money related & macroeconomic components decide its cost with a specific end goal to know the degree and outcomes of the economy. This paper aims to study different internal and external factors that affect cryptocurrencies’ prices. A sample of four digital coins with largest market capitalization has been selected. Daily price data from the years 2015 to 2020 of Bitcoin with other altcoins such as Ethereum, Ripple and Litecoin has been taken. Internal factors consist of demand and supply variables and also the attractiveness associated with its increasing hype. Other factors include KSE-100 Index (Karachi Stock Exchange), USD-PKR (Dollar to Pakistani Rupee) exchange rate and oil prices from PSO (Pakistan State Oil). ARDL analysis has been done to study the effect of these factors on the prices of crypto coins. Our analysis shows that circulating supply has a significant effect on Ethereum and Ripple prices in the long run. Attractiveness has been significant on the prices of Ethereum only.

Anahtar Kelimeler

Cryptocurrency, Bitcoin, Altcoins, Attractiveness, Demand, Supply, Macroeconomic and financial developments, Price.

Kaynakça

• Abeer ElBahrawya, L. A.-S. (2017). Evolutionary dynamics of the cryptocurrency market. physics.soc-ph.
• Baek, C., & Elbeck, M. (2015). Bitcoins as an investment or speculative vehicle? A first look, Applied Economics Letters, 22:1, 30-34. doi:10.1080/13504851.2014.916379
• Baur, D. G., & Dimplf, T. (2021). The volatility of Bitcoinand its role as a medium of exchange and a store of value. Empirical economics, Springer.
• Brue, M. (2001). Microeconomics (16th ed.). McGraw Hill.
• Btcpk.net. (2020, May 14). Retrieved April 14, 2018, from Btcpk.net: https://www.btcpk.net/
• Coingecko. (2020, 07 01). Retrieved from Coingecko.com: https://www.coingecko.com/en
• Coinmarket. (2020, 07 07). Retrieved from Coinmarket.com: https://coinmarketcap.com/
• Dyhrberg, A. H. (2015). Hedging Capabilities of Bitcoin. Is it the virtual gold? University College Dublin. School of Economics, 14.
• Folkinshteyn, D. &. (2015). The Bitcoin Mirage. Journal of Strategic and International Studies. X. Frederik Armknecht, G. O. (2016). Ripple: Overview and Outlook. Germany.
• Galina Hale, A. K. (2018, december). FRBSF Economic Letter. Retrieved January 10, 2019, from frbsf: https://www.frbsf.org/economic-research/files/el2018-12.pdf
• Graeber, D. (2011). Debt The First 5,000 Years. Melville House Publishing, 542.
• Hagman, M. (2014). Money Management Using the Kelly Criterion. UMEA University, 34.
• Kaminski, J. C. (2014). Nowcasting the Bitcoin Market with Twitter signals. MIT Media Lab.
• Karafiloski, E. (2017). Blockchain Solutions for Big Data Challenges. Faculty of Computer Science and Engineering,Ss. Cyril and Methodius University,Skopje, Macedonia, 1-6.
• Katsiampa, P. (2017). Volatility estimation for Bitcoin. Elsevier.
• Kristoufek, L. (2013). What Are the Main Drivers of the Bitcoin. doi:10.1371/journal.pone.0123923
• Lee, A. D. (2014). Bitcoin: Currency or Investment? ssrn.
• Mankiw, N. G. (2006). Principles of microeconomics (6th ed.). south western publishers.
• Martis Buchholz, J. D. (2012). Bits and Bets Information, Price Volatility, and Demand for Bitcoin. Economics 312, 48. Retrieved 10 10, 2018, from https://www.reed.edu/economics/parker/s12/312/finalproj/Bitcoin.pdf
• Mehta, A. A. (2017). Impact of Bitcoin as a World Currency. Accounting and Finance Research , 1-17.
• Morisse, M. (2015). Cryptocurrencies and Bitcoin: Charting the Research Landscape. Department of Informatics University of Hamburg, 1-16.
• Nakamoto, s. (2009). Bitcoin: A Peer-to-Peer Electronic Cash System. 9. www.bitcoin.org.
• Odean, B. M. (2006). All that Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors. The Review of Financial Studies.
• Pavel Ciaian, M. R. (2016, Ffebruary 2). The digital agenda of virtual currencies: Can BitCoin become a global currency? 37. springerlink.com. doi: 10.1007/s10257-016-0304-0
• Peng, M. W. (2009). How do internal capabilities and external partnerships affect innovativeness? https://link.springer.com/journal/10490.
• Pesaran, M. H. (1999). bounds testing approaches to the analysis of long run relationships.
• Pesaran, M. H. (1999). Bounds testing approaches to the analysis of long run relationships.
• Poyser, O. (2017). Exploring the determinants of Bitcoin’s price.
• Rainer Böhme, N. C. (2015). Bitcoin: Economics, Technology, and Governance. Journal of Economic Perspectives—Volume 29, Number 2—Spring 2015—Pages 213–238, 1-32.
• Rauchs, D. G. (2017). Global cryptocurrency benchmarking study. University of Cambridge, Judge business school, UK.
• Rituparna Ghosh, K. H. (2016). Bitcoin or Ethereum? The million dollar question. Carey business school, Johns Hopkins.
• Růstu, l. R. (2016, 3 16). Straight line growth rate. Retrieved 5 17, 2018, from Febmat: https://www.febmat.com/en/article-straight-line-growth-rate/
• Salvatore, D. (n.d.). Managerial economics in a global economy (7th ed.). Fordham University.
• Sauer, B. (2016, April 26). Virtual Currencies, the Money Market, and Monetary policy. International Atlantic Economic Society 2016. doi:10.1007/s11294-016-9576-x
• Selmi, J. B. (2015). What Does Bitcoin Look Like? Annals of Economics and Finance, 45. Retrieved 10 10, 2018, from https://www.researchgate.net/publication/283676718
• Sovbetov, Y. (2018). Factors Influencing Cryptocurrency Prices: Evidence from Bitcoin, Ethereum, Dash, Litcoin, and Monero. Journal of Economics and Financial Analysis, Vol:2, No:2 (2018) 1-27, 1-28.
• Teigland, R. &. (2013). Breaking Out of the Bank in Europe - Exploring Collective Emergent Institutional Entrepreneurship Through Bitcoin. SSRN Electronic Journal(10.2139/ssrn.2263707).
• Vergne, S. W.-P. (2017). Buzz Factor or Innovation Potential:. plos one. doi:10.1371/journal.pone.0169556
• Veronica Greco, D. R. (2001). Coping with uncertainty. Personality and individual differences. doi:31(4):519-534
• Vetro`, M. C. (2018). Blockchain for the Internet of Things: a Systematic Literature Review. Politecnico di torino Repositoryistituzionale, 1-7.
• Wijk, D. v. (2013). What can be expected from the Bitcoin? Erasmus Universiteit Rotterdam(345986), 21.
• Wilson, A. Y. (2015). Characteristics of Bitcoin users. doi:10.1080/13504851.2014.995359
• Yermack, D. (2015). Is bitcoin a real currency. National Bureau of Economic Research(19747).