Explaining Bitcoin’s price fluctuations
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- NTNU Handelshøyskolen 
The purpose of this study is to uncover factors that may help explain Bitcoin’s price fluctuations. The price of the cryptocurrency Bitcoin is volatile and has increased from zero in 2009 to an all-time high of 1287USD in March 2017. To explain the price movements we have estimated two Autoregressive Distributed Lag models by using Ordinary Least Squares method. The data includes 279 weekly observations from 18.09.2011 to 05.02.2017. The dependent variable is the Bitcoin price and the analysis has examined nine independent variables. The results show that political incidents and statements (“shocks”) are significant drivers of Bitcoin’s price. This has, to our knowledge, not been examined in earlier research on Bitcoin and is thus the main contribution of this study. The volume of Bitcoin and Bitcoin’s price has a significant, negative relationship. The interest of Bitcoin, measured by Google searches, has a positive, significant relationship with Bitcoin’s price. The study does not find evidence for Bitcoin being a safe haven investment.