Bitcoin as money, commodity and exchange assets

Abstract

The purpose of this research is to determine the prospects for the use of cryptocurrencies on the example of bitcoins. In the process of theoretical research economic and legal features of cryptocurrencies are revealed: their performing of the money functions, types of economic transactions carried out with their involvement, the legal security of the cryptocurrency market. Problems related to the decentralization of cryptocurrencies are analysed. Among them there are the threat to the stability of national currencies, the use of cryptocurrencies for financing of criminal activities, weak financial control over operations in cryptocurrencies, which reduces the possibility of adequate taxation of related incomes. It was found that improving the legal structure of cryptocurrency circulation, ensuring financial control over it would help to reduce the economic dangers and risks associated with the use of virtual money. The tendencies in change of the extracted volume, exchange price, market capitalization of such cryptocurrency as bitcoin are analysed. It is determined that bitcoin shows sharp price fluctuations over short periods of time that are not related to its quantity. But the demand and supply of bitcoins are influenced not only by speculative expectations, but also by fundamental factors, that influence the prices of other stock assets. In addition, the price of bitcoins is affected by development of the computer technologies and by legislative changes. This allows to make predictions about the dynamics of the price of virtual money. Scenarios for the development of the cryptocurrency market in Ukraine are proposed. Legislative support for the bitcoin market would accelerate its development, make its operations safer for its participants and help to counteract money laundering operations.