Modeling and Simulation of the Bitcoin Price by the System Dynamics Method
محورهای موضوعی : International Journal of Finance, Accounting and Economics StudiesRoohollah Sharafian Ardekani 1 , Amir Daneshvar 2 , Mehdi Madanchi Zaj 3 , Fereydon Rahnamaroodposhti 4
1 - Phd candidate, Department of Financial Management, Science and Research Branch, Islamic Azad University, Tehran, Iran
2 - Assistant Professor, Department of Information Technology Management, Electronic Branch, Islamic Azad University, Tehran, Iran
3 - Assistant professor, Faculty of Financial Management, Central Tehran Branch, Islamic Azad University, Tehran, Iran
4 - Islamic Azad University, Science and Research Branch
کلید واژه: bitcoin, price, modeling, simulation, system dynamics,
چکیده مقاله :
Regarding to the emerging blockchain technology and the creation of the Bitcoin cryptocurrency based on that, also lots of attention to the economic and financial aspects of Bitcoin in recent years, in this article, the cause-and-effect relationship between bitcoin price and factors has been studied. The price of Bitcoin is modeled by powerful system dynamics tools. Bitcoin like any tradable commodity in the economy is affected by supply and demand, however, variables are defined based on the inherent nature of the bitcoin system. State variable is price and some indices are selected to represent typical supply and demand. Google search is a new variable which reflects market anticipations and acts on the price. The simulation results are consistent with past data by determining the boundaries of the system indicating external factors and internal relationships. The model provides the possibility of predicting future changes based on the assumptions for changes in all causal factors.
Regarding to the emerging blockchain technology and the creation of the Bitcoin cryptocurrency based on that, also lots of attention to the economic and financial aspects of Bitcoin in recent years, in this article, the cause-and-effect relationship between bitcoin price and factors has been studied. The price of Bitcoin is modeled by powerful system dynamics tools. Bitcoin like any tradable commodity in the economy is affected by supply and demand, however, variables are defined based on the inherent nature of the bitcoin system. State variable is price and some indices are selected to represent typical supply and demand. Google search is a new variable which reflects market anticipations and acts on the price. The simulation results are consistent with past data by determining the boundaries of the system indicating external factors and internal relationships. The model provides the possibility of predicting future changes based on the assumptions for changes in all causal factors.
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