The role of Bitcoin on developed and emerging markets – on the basis of a Bitcoin users graph analysis

Abstract

This paper joins discussions about Bitcoin’s relationship to investments in developed and emerging markets. Our study contributes to the ongoing discussion of the role of Bitcoin for investors. In our research, we analyse relationships on financial markets with Bitcoin user graph characteristics. We examine the relationships between Bitcoin rates of return, stock indices, and variables characterising Bitcoin users who carried out the largest number of Bitcoin buy and sell transactions and users who carried out transactions with the highest amounts. We mainly focus on the problem whether the Bitcoin rate of return is mostly driven by capital market situation or major Bitcoin users behaviour. Our results confirmed that there is not, in general, significant relationship between financial market situation (if such relationship does exist, it is found in emerging markets). However, our findings indicate a significant impact of the behaviour of major Bitcoin users on Bitcoin rate of return.