A critical analysis of Bitcoin through the efficient market hypothesis

The efficiency of markets has been an important criterion in examining various stocks in the financial literature. The examination of this hypothesis, which examines the predictability in markets based on price movements, is carried out through various econometric and economic analyses. It can be posited that in an efficient market, price movements exhibit a stochastic nature. In such a market milieu, it becomes evident that price movements succinctly encapsulate the assimilation of all pertinent information. This type of analysis is necessary to ensure that the criteria in an investor's or economist's orientation towards the asset under consideration coincide with rational economic behavior. Bitcoin, the subject of the thesis, is an economic object about which there are many speculative discourses. Its qualities make it quite revolutionary, as it is the first real-world application of Blockchain, thus necessitating the need to examine Bitcoin's place in the economic field. Because Bitcoin's revolutionary qualities make it a first in its field, whether it is money, a commodity or an investment asset should be subjected to various economic analyses. The main purpose of this research is to examine the efficiency findings in the price movements of Bitcoin as a revolutionary product. However, since econometric studies alone will not be sufficient to understand the efficiency and economic role of information in it, it is aimed to examine the distribution of information in its own market within the scope of security and third parties through the examination of Bitcoin as a Blockchain technology. Another aim is to try to determine its place and status in the economic world by comparing its structural features with traditional financial instruments. Within the framework of all these investigations, various unit root tests and variance ratio analyses were carried out within the scope of this research. Through these tests, the existence of the random walk movement has been proven, and in this context, it has become possible to say that Bitcoin is efficient at the empirical level. In a qualitative sense, it would be correct to say that Bitcoin is similar to money, commodities, and investment assets on many levels, but it is a distinct investment instrument as it has different qualities than traditional financial instruments. As a result, Bitcoin is a revolutionary financial instrument whose market efficiency has been proven by examining it in a separate context.