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Another Look at Cryptocurrency Bubbles

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  • Marc Gronwald

Abstract

This paper deals with cryptocurrency bubbles. First, it points out that a number of recent papers on cryptocurrency bubbles are awed due to an insufficient consideration of the fundamental value of cryptocurrencies. As even fiat money is said to exhibit features of bubbles, the same applies to cryptocurrencies. Thus, any empirical investigation into either the presence of cryptocurrency bubbles or the fundamental value of cryptocurrencies is needless. Second, the paper conducts a short empirical analysis into the relationship of the prices of Etherum and Bitcoin. Evidence of explosive periods is found in the price of Etherum even if this price is expressed in terms of Bitcoin rather than US Dollars. These periods, however, are found to be in the first half of 2016 and 2017, respectively, but not during the price peak period of Bitcoin witnessed end of 2017 and beginning of 2018.

Suggested Citation

  • Marc Gronwald, 2019. "Another Look at Cryptocurrency Bubbles," CESifo Working Paper Series 7743, CESifo.
    • Handle: RePEc:ces:ceswps:_7743
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp7743.pdf
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    References listed on IDEAS

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    5. Kiyotaki, Nobuhiro & Wright, Randall, 1989. "On Money as a Medium of Exchange," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 927-954, August.
    6. Marc Gronwald, 2013. "Explosive Oil Prices," CESifo Working Paper Series 4376, CESifo.
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    1. Athanasios Tsagkanos & Aarzoo Sharma & Bikramaditya Ghosh, 2022. "Green Bonds and Commodities: A New Asymmetric Sustainable Relationship," Sustainability, MDPI, vol. 14(11), pages 1-16, June.

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    More about this item

    Keywords

    cryptocurrencies; bubbles; bitcoin; Etherum; fundamental value; intrinsic value; fiat money;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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