New Research Links Bitcoin Price Spikes to Media Hype

A new research paper aims to understand bitcoin’s price fluctuations and usage patterns through empirical analysis. Notably, the work finds a positive link between media attention and the value of the cryptocurrency.
‘The rise of bitcoin has generated interest from the media and scientific community. However our knowledge of this innovation is still insufficient, particularly when examined from perspectives of finance and economics,’ the study says.
To address this gap, the researchers conducted two complementary empirical investigations. The first aimed to clarify the factors affecting the rate of return on investment in bitcoin, while the second examined the sales of merchants who have decided to accept bitcoin as a form of payment.
The work, titled Price Fluctuations and the Use of Bitcoin: An Empirical Inquiry, is the result of a collaboration by Michal Polasik and Anna Piotrowska, two researchers from Poland’s Nicolaus Copernicus University’s finance department; Tomasz Piotr Wisniewski and Geoffrey Lightfoot from the University of Leicester School of Management; and Radoslaw Kotkowski, an employee of the Polish Bank Association whose research was conducted independently and is associated with the Warsaw School of Economics.
Lightfoot told CoinDesk that the article is to be submitted to a peer-reviewed journal and that currently the authors are collecting comments from colleagues before the final submission.
According to the authors, their work ‘enriches and verifies earlier theoretical considerations with data, and is one of the first empirical attempts to model the bitcoin economy’.

This post was published at Coin Desk on November 19, 2014.