Open AccessIs Bitcoin Price Driven by Macro-financial Factors and Liquidity? A Global Consumer Survey Empirical Study
Author(s) -
Shinta Amalina Hazrati Havidz,
Viendya Ervina Karman,
Indra Yudha Mambea
Publication year - 2021
Publication title -
organizations and markets in emerging economies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.195
H-Index - 4
eISSN - 2345-0037
pISSN - 2029-4581
DOI - 10.15388/omee.2021.12.62
Subject(s) - market liquidity , monetary economics , cryptocurrency , economics , market capitalization , macro , index (typography) , financial economics , stock exchange , financial asset , capital asset pricing model , stock market , business , finance , paleontology , computer security , horse , world wide web , computer science , biology , programming language
This research aims to utilize macro-financial and liquidity elements as the factors that may affect the price of Bitcoin as the largest cryptocurrency in terms of market capitalization. The macro-financial factors analyzed in this study were foreign exchange, stock market index, interest rates, and gold, while liquidity ratio is the internal factor. This study applied a fixed-effect model (FEM) and Generalized Method of Moments (GMM) on gathered weekly data from 1 January 2017 to 29 December 2019 from 18 countries with the total of 2,826 observations. The analysis revealed that US Dollar amplifies Bitcoin trading; an increase in interest rate will decrease investors’ intention to invest in Bitcoin as a speculative asset, and gold could replace Bitcoin as a substitute asset. Moreover, Bitcoin was found to be highly liquid, which attracts many investors, while the stock market index proved to be insignificant.