Authors : Elena Karasik and Anastasiya Kuzmina
Abstract: In the view of globalization processes and switch from industrialism to post-industrialism in developed countries, it appears that formation of new economic mechanisms would require creation of new world reserve currency which could be represented by digital currencies that are not exposed to direct control from the side of any country. This study is dedicated to crypto-currency Bitcoin. Originality of this research is represented by revealing correlation between formation of Bitcoin’s exchange rate and such factors as number of transactions and number of queries in Wikipedia with the help of econometric methods. In order, we could study formation of currency exchange rate, we performed analysis of stationary state of time series, defined the moment of change in trend’s incline that was connected with changing structure, we built VECM Model and impulse response functions. We have also performed Ljung-Box test for the presence of residual autocorrelation. We have revealed correlation between In-transformed number of transactions and prices for Bitcoin for the whole period and during the period before structural changed. Besides, we have touched upon the questions about the role of digital currencies in modern economy and particularly in crypto-currency Bitcoin.
Elena Karasik and Anastasiya Kuzmina, 2015. “Digital Money in World Economy Exemplified by Crypto-Currency Bitcoin: Principle of Functioning and Economical Analysis of Exchange Rate’s Formation”. International Business Management, 9: 868-876.