Faculty Mentor

Mark Holmgren, PhD

Document Type

Poster

Department

Economics

Abstract

Bitcoin, a decentralized digital currency (property), has gained significant attention recently as a potential alternative to traditional financial systems. This research project aims to explore the market variables of Bitcoin by conducting a multiple regression analysis. The literature review highlights market dynamics and the impact of Bitcoin in economics and finance, specifically in banking and monetary systems. It explores Bitcoin's decentralized nature and limited supply as a more secure and stable form of money, contrasting it with the flaws and inefficiencies of centralized banking systems. The dataset provides information on the Bitcoin market from July 23, 2010, to April 16, 2023, including variables such as Bitcoin Monthly Close Price, Volume, Market Cap, Hash Rate, and Total Circulating Supply. The methodology employs a multiple regression model to estimate the relationship between the Bitcoin Monthly Close Price (dependent variable) and the independent variables: Volume, Market Cap, Hash Rate, and Total Circulating Supply. Results from the dataset show a high R-squared value of 0.9988, suggesting that the independent variables explain 99.88% of the variation in the Bitcoin price, indicating a strong explanatory power of the model. These findings highlight the importance of adoption, acceptance, and scarcity in determining Bitcoin's price dynamics. Further research could explore additional variables and factors to deepen our understanding of Bitcoin's price movements and inform investment decisions, research efforts, and policymaking in the Bitcoin market.

Comments

Primary document is the revised report and poster frames on this project.

Preliminary research was presented as a poster at the 2023 Symposium titled "Exploring the Adoption and Impact of Bitcoin: A Comparative Analysis".

The frames from the poster presented at the 2023 Student Research and Creative Works Symposium are included as an additional file.

For questions, email the author at zach.biedscheid@gmail.com

Additional Files
Exploring the Adoption and Impact of Bitcoin_ A Comparative Analysis.pdf (942 kB)
Original poster frames
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Bitcoin Price Dynamics: A Multiple Regression Analysis of Market Variables

Bitcoin, a decentralized digital currency (property), has gained significant attention recently as a potential alternative to traditional financial systems. This research project aims to explore the market variables of Bitcoin by conducting a multiple regression analysis. The literature review highlights market dynamics and the impact of Bitcoin in economics and finance, specifically in banking and monetary systems. It explores Bitcoin's decentralized nature and limited supply as a more secure and stable form of money, contrasting it with the flaws and inefficiencies of centralized banking systems. The dataset provides information on the Bitcoin market from July 23, 2010, to April 16, 2023, including variables such as Bitcoin Monthly Close Price, Volume, Market Cap, Hash Rate, and Total Circulating Supply. The methodology employs a multiple regression model to estimate the relationship between the Bitcoin Monthly Close Price (dependent variable) and the independent variables: Volume, Market Cap, Hash Rate, and Total Circulating Supply. Results from the dataset show a high R-squared value of 0.9988, suggesting that the independent variables explain 99.88% of the variation in the Bitcoin price, indicating a strong explanatory power of the model. These findings highlight the importance of adoption, acceptance, and scarcity in determining Bitcoin's price dynamics. Further research could explore additional variables and factors to deepen our understanding of Bitcoin's price movements and inform investment decisions, research efforts, and policymaking in the Bitcoin market.