An econometric analysis of the relationship between crypto currency bitcoin with economic indicator

Crypto currency Bitcoin offers a function that allows instant payment without space and time constraints, with a decentralized network architecture and no have physical feature. Bitcoin offers anonymity and confidentiality to its users, so there is no cancellation or follow-up. Bitcoin can be purchased, sold, exchange with other currencies and can function as a payment tool for purchases. Since these operations are carried out directly through the network without any intermediary between the two sides, the cost is negligible. With these advantages, Bitcoin has reached a significant user audience and created a significant increase in demand for itself. Thus, it became a usable asset in economic activities and assumed the function of investment and change in the markets. The aim of this study is to investigate the relationship between various economic indicators with the first and most popular crypto-currency Bitcoin. Bitcoin associated economic indicators; interest rates, stock indexes, foreign exchange and commodities has been categorized into four groups. For this purpose, the relationship between economic indicators and Bitcoin, 16.07.2010-16.05.2019 period using daily data, Granger causality test and based on an impact-response functions and variance decomposition methods has been analyzed by the VAR method. As a result of the empirical analysis; weekly and monthly Euro Libor interest rates, EUR / USD, JPY / USD, CNY / USD exchange rates and gold prices affected Bitcoin prices, while Dow Jones 30 and Nikkei 225 stock indexes were affected by Bitcoin prices. Keywords: Crypto Currency, Bitcoin, Blockchain, Economic Indicators.