Asymmetric Linkage Analysis between Bitcoin Transaction Network Structure Evolution and Bitcoin Price Fluctuation

Abstract

Abstract: Bitcoin is the most influential digital cryptocurrency of the time and its price mechanism has attracted much attention from researchers in the world. Based on the heterogeneous network theory, this paper uses Bitcoin transaction data of 1,307 days from 1 January 2015 to 31 July 2018 to construct a Bitcoin transaction evolution network and, applies long-term series correlation analysis, cointegration test, linear regression and threshold regression model to analyze the linkage relationship between the structure evolution of Bitcoin heterogeneous transaction network and Bitcoin price fluctuation. The research findings are as follows. First, the evolution of number of transactions, number of addresses, average balance of addresses and network diameter has positive linkage effects on the fluctuation of Bitcoin price. Second, the linkage effect is asymmetric in different price ranges:when Bitcoin price is below or above $ 4,360, there is a significant difference on the linkage effect between network structure evolution and price fluctuation as the former has a significantly greater impact on the price fluctuation than the latter.

Key words: digital cryptocurrency, Bitcoin pricing, heterogeneous network analysis, correlation analysis, asymmetric linkage analysis

Zhang Wen, Xie Rui, Yu Lean, Li Jian. Asymmetric Linkage Analysis between Bitcoin Transaction Network Structure Evolution and Bitcoin Price Fluctuation[J]. Management Review, 2024, 36(8): 39-51.

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