Cryptocurrency and financial markets: An application on Turkey

Money has survived in different ways in its journey to the present and has undergone a number of changes. Each change has been affected by commercial, social and technological developments. Virtual currencies are also the last representative of this change. Virtual money is defined as a digital currency created by cryptological transactions, which enables online payments between peers (Peer to Peer) and is not under the control of any central financial institution. In the study, selected by a number of financial variables in Turkey (USD, EURO, POUND, SDR, BİST 100, Republic gold, money supply M1 and M2) have examined the relationship between virtual currency Bitcoin. In this context, monthly data for 2013-2019 period were used. As a result of the analyzes, the first differences of the variables were found to be stationary, while the existence of a long-term cointegration between Bitcoin and other financial variables was determined. The Granger Causality test, which investigates causality between variables, showed that there is a 5% significance level from SDR and USD to BTC and a 10% significance level from Euro and BIST 100 to BTC in the equation where Bitcoin is a dependent variable.