What can be expected from the Bitcoin?

Only recently developed by the Japanese academic Satoshi Nakamoto (2008), the Bitcoin is a virtual currency that can be traded all over the world. Even though the money has been printed on several occasions the essence of the Bitcoin lies in the fact that it exists entirely on the digital highway. The coins themselves are a string of code that can be stored in the so-called wallet on your own computer. Subsequently, the Bitcoins can be used in transactions all over the internet, provided that the other person accepts the Bitcoin as a means of payment. The most remarkable thing about all this is that neither a government nor any financial institution is involved in any part of this transaction or in the regulation of the currency. Currently, the main users of the Bitcoin are technologically interested geeks who want to use the newest innovations, anarchists who have lost trust in the governments and the banking systems, and speculative risk-seekers looking for a new gamble. However, this is quickly changing due to the increase in the value of the Bitcoin and the attention that it gets in the news. In the academic sphere, little research has been done on the subject and the research that has been done is mostly technical and concerns cryptography rather than economics. However, my belief is that the Bitcoin is a rare, new phenomenon worth researching on the economic level as well. The fact is that this string of code, of which the Bitcoin exists, is worth intrinsically nothing. So, people are willing to spend an increasing amount of money on something that is literally worthless, with no guarantee that the Bitcoin will be worth anything in the future. If an explanation could be found where the value of the Bitcoin is derived from or what influences the value of the Bitcoin, a future for the Bitcoin can be predicted much better than before. Therefore the question is raised: “How does day-to-day financial data influence the value of the Bitcoin?” The literature that is investigated concerns the theory of fiat money, money without intrinsic value, and investigates what drives the value of this fiat money. Subsequently, financial data will be collected and used in the analysis to see what affects the value of the Bitcoin. Finally, a conclusion will be drawn from the results of this analysis that will show what has an effect on the value of the Bitcoin. After that, several suggestions will be given for an expansion of this research in several ways.