International trade and cryptocurrency movements: A network analysis

This thesis examines the intricate dynamics between international trade and cryptocurrency transactions, with a particular focus on Bitcoin. Employing an extensive dataset that includes the Direction of Trade Statistics for imports and exports, alongside the World Governance Indicators, this study explores the multifaceted relationships between global trade activities and cryptocurrency operations. The findings reveal that countries with substantial trade volumes are more likely to engage in significant cryptocurrency transactions, suggesting that cryptocurrencies are increasingly used to facilitate international trade. This research supports several hypotheses, including the positive correlation between trade volume and cryptocurrency activity, and the role of cryptocurrencies in enabling financial activities in countries facing capital account deficits. Conversely, the study also addresses hypotheses that were not supported, providing critical insights into the limitations of cryptocurrencies in contexts of political and economic instability. By analyzing the overlap and distinctions between cryptocurrency and traditional trade networks, this thesis contributes to a deeper understanding of the evolving landscape of digital finance and its implications for international trade and economic policy.