What do cross-country Bitcoin holdings tell us? Monetary and institutional discontent vs financial development

Author:

Koziuk Viktor1ORCID

Affiliation:

1. Doctor of Economics, Professor, Head of the Economics Department at West Ukrainian National University

Abstract

Cryptocurrencies show tremendous growth by market capitalization, however Bitcoin cross-country holdings are still in question. The purpose of the paper is to show that inflation discontent with the rule of law failures can explain why residents of different countries are prone to cryptocurrency holdings. The level of financial development is also considered. A hypothesis is proposed for more complex and segmented motives of Bitcoin holdings, tested by the OLS method. Single- and multi-factor regressions with independent variables are used, which can validate cross-country Bitcoin holdings in terms of inflation discontent, quality of institutions and financial development. Regression results confirm the idea of more segmented motives to hold Bitcoins. First, the hedge against inflation motive is rooted in the institutional weakness of central banks, and the regression results show that inflation variables are the most significant. Second, the hedge against institutional risks of asset ownership motive, based on the lack of rule of law and the relevant variable, is best performing among other institutional variables. Third, it is wrong to neglect financial development. However, it only plays a role in interaction with better innovation performance, meaning that crypto investors try not only to diversify their portfolios, but also to profit from involving in a sector with promising technological perspectives. The main takeaway is that institutional factors help explain why people in countries with worsened inflation and institutional performance tend to hold a large fraction of Bitcoins in assets. Obviously, monetary and institutional fragility is underestimated in the general discussion about the nature of digital money.

Publisher

LLC CPC Business Perspectives

Subject

Economics, Econometrics and Finance (miscellaneous),Economics and Econometrics,Finance

Cited by 5 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3