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The Influence of Cryptocurrency Bitcoin over the Romanian Capital Market

Author

Listed:
  • Stefan-Cosmin DANILA

    (“Alexandru Ioan Cuza” University of Iasi, Romania)

  • Ioan-Bogdan ROBU

    (“Alexandru Ioan Cuza” University of Iasi, Romania)

Abstract

Within the decision-making process, investors are interested in finding the most effective solutions that will allow them to obtain short-term benefits. Current economic environment is characterized by the emergence of new financial instruments that can assist investors to diversify their investment portfolio. Crypto-currencies represents a category of financial assets that can be used by investors to reduce risk and achieve significant returns. Therefore, the study intends to analyze the financial behavior of investors in the moment of publishing the financial statements. Financial statements could have a positive or negative influence on the investment portfolio and structure. The issue analyzed by this study is represented by the ability of the cryptocurrency Bitcoin to be considered as an alternative investment asset. The study is divided into two parts. In the first part, the study presents the review of literature about value-relevance, cryptocurrency term and speculative bubble. The second part presents the research methodology and results. The results of the study validate the hypothesis of this study, cryptocurrency Bitcoin being a financial asset that can be used as an alternative investment asset for diversification of investment portfolio.

Suggested Citation

  • Stefan-Cosmin DANILA & Ioan-Bogdan ROBU, 2019. "The Influence of Cryptocurrency Bitcoin over the Romanian Capital Market," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 17(155), pages 507-507.
    • Handle: RePEc:aud:audfin:v:17:y:2019:i:155:p:507
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    References listed on IDEAS

    as
    1. Filip, Andrei & Raffournier, Bernard, 2010. "The value relevance of earnings in a transition economy: The case of Romania," The International Journal of Accounting, Elsevier, vol. 45(1), pages 77-103, March.
    2. Kaizoji, Taisei, 2000. "Speculative bubbles and crashes in stock markets: an interacting-agent model of speculative activity," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 287(3), pages 493-506.
    3. Basu, Sudipta, 1997. "The conservatism principle and the asymmetric timeliness of earnings," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 3-37, December.
    4. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 2001. "The relevance of the value relevance literature for financial accounting standard setting: another view," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 77-104, September.
    5. Cheah, Eng-Tuck & Fry, John, 2015. "Speculative bubbles in Bitcoin markets? An empirical investigation into the fundamental value of Bitcoin," Economics Letters, Elsevier, vol. 130(C), pages 32-36.
    6. Elisabeta Jaba & Ioan-Bogdan Robu & Costel Istrate & Christiana Brigitte Balan & Mihai Roman, 2016. "Statistical Assessment of the Value Relevance of Financial Information Reported by Romanian Listed Companies," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 27-42, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    capital market; crypto-currency; Bitcoin; financial information; value relevance; conservatism accounting;
    All these keywords.

    JEL classification:

    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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