Date of Award
Bachelor of Arts
The worlds first successful crypto currency (Bitcoin) has gained a lot of attention both positive and negative. The main issue keeping Bitcoin from being fully accepted by the public is its high volatility and unpredictability. This research provides an empirical analysis that offers insights into the factors that cause Bitcoin to maintain a high price volatility. The primary goal of the research is to determine whether or not the media plays a role on Bitcoin volatility. Our model uses ordinary least squares regression analysis to support the findings of previous research that generally uses GARCH models. The results show that Bitcoin volatility is primarily correlated with Google trends search data. Furthermore we find that negative news announcements have a significant positive correlation with Bitcoin volatility; whereas, economic health indicator variables yield insignificant results. Although our analysis suggest Bitcoin is an unsafe investment tool, we propose a number of future research possibilities that should enhance our understanding of crypto currencies so that they can eventually be utilized to their fullest potential.
McWharter, Nicholas, "Bitcoin and Volatility: Does the Media Play a Role?" (2018). Economics Student Theses and Capstone Projects. 82.