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Bubbles and rationality in bitcoin
Author(s) -
Waters George A.
Publication year - 2019
Publication title -
economic notes
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.274
H-Index - 19
eISSN - 1468-0300
pISSN - 0391-5026
DOI - 10.1111/ecno.12133
Subject(s) - economics , cointegration , asset (computer security) , economic bubble , rationality , bubble , econometrics , monetary economics , financial economics , mathematical economics , microeconomics , computer science , computer security , parallel computing , law , political science
Periodically collapsing rational bubbles model speculative demand in asset markets. The price and quantity of bitcoin are integrated of different orders, which is evidence of a bubble. Cointegration tests that allow for the potential presence of such bubbles with alternative proxies for fundamentals cannot reject a bubble in bitcoin.
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