Selected Cryptocurrency Returns and Capital Gains Tax - Based on the Example of Countries with Varying Degrees of Legal Regulations Concerning Cryptocurrencies

Gniadkowska-Szymańska, Agata; Draženović, Bojana Olgić; Nikolaj, Stella Suljić

doi:10.18778/2391-6478.3.35.04

Cited by 1 publication

(1 citation statement)

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“…A similar effect to the one described above was found by Demir et al (2022) in their study on the behavior of fan tokens; in this case, the influence on the price was due to the victories or defeats of the soccer teams represented by the tokens. However, Bitcoin has partially recovered from major falls and is still an asset that is present in the market, according to Gniadkowska-Szymańska et al (2022). Our study compares the durations of the bubbles in terms of days.…”

Section: Discussion Of Resultsmentioning

confidence: 96%

Bitcoin’s bubbly behaviors: does it resemble other financial bubbles of the past?

Náñez Alonso,

Jorge-Vázquez,

Echarte Fernández

et al. 2024

Humanit Soc Sci Commun

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A number of financial bubbles have occurred throughout history. The objective of this study was to identify the main similarities between Bitcoin price behavior during bubble periods and a number of historical bubbles. Once this had been carried out, we aimed to determine whether the solutions adopted in the past would be effective in the present to reduce investors’ risk in this digital asset. This study brings a new approach, as studies have previously been conducted analyzing the similarity of Bitcoin bubbles to other bubbles individually, but these were not conducted in such a broad manner, addressing different types of bubbles, and over such a broad time period. Starting from a dataset with 9967 records, a combined methodology was used. This consisted of an analysis of the standard deviations, the growth rates of the prices of the assets involved, the percentage increase in asset prices from the origin of the bubble to its peak and its fundamental value, and, finally, the bubble index. Lastly, correlation statistical analysis was performed. The results obtained from the combination of the above methods reveal the existence of certain similarities between the Bitcoin bubbles (2011, 2013, 2017, and 2021) and the tulip bubble (1634–1637) and the Mississippi bubble (1719–1720). We find that the vast majority of the measures taken to avoid past bubbles will not be effective now; this is due to the digital and decentralized nature of Bitcoin. A limitation of the study is the difficulty in making a comparison between bubbles that occurred at different historical points in time. However, the results obtained shed light and provide guidance on the actions to be taken by regulators to ensure the protection of investors in this digital asset.

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Section: Discussion Of Resultsmentioning

confidence: 96%