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Title: Price Fluctuations and the Use of Bitcoin: An Empirical Inquiry
Authors: Polasik, M.
Piotrowska, A.
Wisniewski, Tomasz Piotr
Kotkowski, R.
Lightfoot, Geoffrey
First Published: 2015
Publisher: Taylor & Francis (Routledge), formerly ME Sharpe
Citation: International Journal of Electronic Commerce, 2015, in press
Abstract: Over recent years, interest has been growing in Bitcoin, an innovation which has the potential to play an important role in e-commerce and beyond. The aim of our paper is to provide a comprehensive empirical study of the payment and investment features of Bitcoin and their implications for the conduct of e-commerce. Since network externality theory suggests that the value of a network and its take-up are interlinked, we investigate both adoption and price formation. We discover that Bitcoin returns are driven primarily by its popularity, the sentiment expressed in newspaper reports on the cryptocurrency, and total number of transactions. The paper also reports on the first global survey of merchants who have adopted this technology and model the share of sales paid for with this alternative currency, using both ordinary and Tobit regressions. Our analysis examines how country, customer and company-specific characteristics interact with the proportion of sales attributed to Bitcoin. We find that company features, use of other payment methods, customers’ knowledge about Bitcoin, as well as the size of both the official and unofficial economy are significant determinants. The results will be of interest to traders who seek to understand factors driving the price and will help to inform vendors as to which are the most favorable circumstances for the adoption of the currency for online transactions.
ISSN: 1086-4415
Links: TBA
Embargo on file until: 1-Jan-10000
Version: Post-print
Status: Peer-reviewed
Type: Journal Article
Rights: Copyright © 2015, ME Sharpe. Deposited with reference to the publisher’s archiving policy available on the SHERPA/RoMEO website.
Description: 18 mth embargo from publication
Appears in Collections:Published Articles, School of Management

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