Abstract
The results of empirical analyses confirm that analysed unsystematic factors, the Stock-to-Flow index (S2F), and information on the Bitcoin (BTC) are directly correlated with BTC values. These results are expected and in line with the economic theory; however, this research paper aimed to investigate the impact of unsystematic factors on the value of decentralised virtual cryptocurrency BTC. Its aim was also to analyse the reasons for significant oscillations of market values in relation to the S2F and S2FX model and thus confirm the reliability of these models in the estimation of BTC value. The research further confirms the strong influence of non-technical information directly linked with the BTC. The limitations of this paper are the lack of possibilities for examining the impact of non-technical information affecting the Bitcoin price deviation regarding the S2F model. In addition to all mentioned limitations, the research results indicate the relevance of the S2F and S2FX models and show a strong impact of (half) the information on the value of cryptocurrencies.
Highlights
The 2008 financial crisis and the 2020 COVID-19 pandemic accelerated some of the expected changes in the management of financial systems
This research hypothesises that limited Bitcoin production, and its scarcity explained by S2F and S2FX methods in the situation of capital market development, strongly influences its constant growth, and that the market overreaction anomaly in non-technical information on Bitcoin strongly affects the change in its value and deviations from the S2F model-based value
After a thorough analysis of the impact of systematic and unsystematic factors on Bitcoin value and analysis of the identified shortcomings of the S2F and S2FX models, we have noticed that strong oscillations of Bitcoin values shown in Figure 1 around its value determined by the above models usually occur at the time of the emergence of information that affect its value as an unsystematic factor
Summary
The 2008 financial crisis and the 2020 COVID-19 pandemic accelerated some of the expected changes in the management of financial systems The consequences of these crises on the globalisation process, financial operations, production, and international trade affected all segments of the economy. The global COVID-19 pandemic has caused a severe economic crisis in the supply and demand of goods and services in domestic and international markets (Kraus et al 2020), and we assume there will be strong changes in the functioning of the global financial system. State interventions and incentives have delayed the expected changes in the economy burdened by debt, inflation, unemployment, and production decline. It is only a matter of time before the real economy succumbs to the burden of debts and money printing. Irreversibility and automation of financial contracts, complete control of funds, complete transparency of ecosystems, increasing price, and market efficiency are only some of the expected changes
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