Effects of virtual money samples BITCOIN on financial markets

Virtual currencies have been mentioned as the most popular financial innovation of the recent years with both their claims of being a universal currency and the block chain technology they possess. In particular, Bitcoin, the first and most popular example of its kind, has rapidly gained its place in economic life and has started to be used in daily commercial transactions. The distributed ledger technology, which it houses in its infrastructure, has eliminated the dependence on a central authority and the obligation to trust, and has started a new era in terms of financial freedom. As a result of the economic and scientific developments, the concept of money, which is increasingly becoming an abstract structure, has become a more abstract concept, especially in developed economies, and has been replaced by digital money. The evolution process, which began with commercial transactions being made over the internet, has created new systems by creating radical changes in traditional payment methods. The quick adoption of Bitcoin by economic units and the high increases in trading volume due to its increasing demand have caught the attention of financial markets and forced them to innovate radically. Its potential of being a universal currency has put into question the presence of reputable currencies, while the distributed ledger technology has threatened intermediary institutions, especially central banks. In this context, the study covers developments in virtual currencies and Bitcoin, and it examines the possible effects on financial markets. It has been shown in the research that technological innovation involving Bitcoin and virtual currencies threatens and forces financial system elements into innovation, but in the current situation it is unlikely to replace reputable currencies and disable regulatory agencies such as central banks.