From thesis to reality: A 10-year academic exploration of Bitcoin's persistent bullish trends

TLDR: Over a decade of academic deep dives suggests that Bitcoin's not just digital gold, but the rockstar of modern finance with a hint of eco-controversy and a sprinkle of global appeal.

I speed-read through (almost) all the Bitcoin articles in the last 10 years. Based on my search, I found about 1267 articles and narrowed it down to the most important ones.

Note that almost no one researched Bitcoin before 2020 (yeah, everyone here knows what happened after that).

Take a look at the authors publishing about it here between 2022 and 2014 (interesting detail: many of them have quality publications in top Financial/Economic journals):

Source: Myself using ResearchRabbit, Google Academics, and Mendeley.

Here are the most important findings along with each source (bold emphasis mine). I'd like to discuss some of them in the comments. Which one is your favorite? Check the list.

1- "Bitcoin can be considered the new digital gold as it substantially improves the performance of equity positions under tail risk constraints, but gold still plays an important role in portfolio risk management."

Gkillas, K., & Longin, F. (2019). Is Bitcoin the New Digital Gold? Evidence From Extreme Price Movements in Financial Markets. Econometric Modeling: Capital Markets - Asset Pricing eJournal.

2- "Our results suggest that when the time scale is greater than two months, gold can be considered as a safe haven for investors holding the MSCI World and US dollar indices and when the time scale exceeds three months, Bitcoin can be considered a safe haven for the MSCI World index."

Diniz-Maganini, N., Diniz, E., & Rasheed, A. (2021). Bitcoin’s price efficiency and haven properties during the COVID-19 pandemic: A comparison. Research in International Business and Finance, 58, 101472 - 101472.

3- "Hence, the status of gold will not be completely threatened by Bitcoin, and they are complementary to each other instead of in competition."

Su, C., Qin, M., Tao, R., & Zhang, X. (2020). Is the status of gold threatened by Bitcoin? Economic Research-Ekonomska Istraživanja, 33, 420 - 437.

4- "The findings based on the original sample and an extended sample period show that Bitcoin exhibits distinctively different return, volatility, and correlation characteristics compared to other assets including gold and the US dollar."

Baur, D., Dimpfl, T., & Kuck, K. (2017). Bitcoin, gold and the US dollar – A replication and extension. Finance Research Letters.

5- "The analysis highlights that Bitcoin, more specifically its underlying technology, is a “safe haven” that allows facing the modern environmental challenges better than gold."

Cocco, L., Tonelli, R., & Marchesi, M. (2019). An Agent-Based Model to Analyze the Bitcoin Mining Activity and a Comparison with the Gold Mining Industry. Future Internet, 11, 8.

6- "Assuming that virtual currencies with a longer history can provide an estimate for Bitcoin’s prospects, we project that Bitcoin will be less influenced by speculative trades and become a low-cost alternative to real currencies."

Kim, T. (2015). The Predecessors of Bitcoin and Their Implications for the Prospect of Virtual Currencies. PLoS ONE, 10.

7- "Importantly, we report the nuanced result that most often the relations between bitcoin and aggregate commodity, on the one hand, and between bitcoin and gold, on the other, are asymmetric, nonlinear, and quantiles-dependent, suggesting the need to apply non-standard cointegration models to uncover the complexity and hidden relations between Bitcoin and asset classes."

Bouri, E., Gupta, R., Lahiani, A., & Shahbaz, M. (2018). Testing for asymmetric nonlinear short- and long-run relationships between bitcoin, aggregate commodity, and gold prices. Resources Policy.

8- "Based on it, Bitcoin may be used as a safe haven by the financial market and its intrinsic characteristics might help the investors and governments to find new mechanisms to deal with monetary transactions."

Neves, R. (2020). Bitcoin pricing: impact of attractiveness variables. Financial Innovation, 6, 1-18.

9- "Our findings suggest that as long as Bitcoin price will be mainly driven by speculative investments, Bitcoin will not be able to compete with standard currencies."

Ciaian, P., Rajcaniova, M., & Kancs, d. (2016). The digital agenda of virtual currencies: Can BitCoin become a global currency? Information Systems and e-Business Management, 14, 883-919.

10- "The findings suggest that, despite high energy consumption and adverse environmental impact, Bitcoin continues to be an instrument used in the economic environment for a variety of purposes."

Badea, L., & Mungiu-Pupӑzan, M. (2021). The Economic and Environmental Impact of Bitcoin. IEEE Access, 9, 48091-48104.

11- "But if bitcoin will be stable in the future, then it will be easily accepted worldwide, and in the long run, people will have more faith in the cryptocurrency technology and its usability."

Sahoo, P. (2017). Bitcoin as digital money: Its growth and future sustainability. Theoretical and Applied Economics, 53-64.

12- "We conclude that Bitcoin and Gold feature fundamentally different properties as assets and linkages to equity markets."

Klein, T., Thu, H., & Walther, T. (2018). Bitcoin is not the New Gold – A comparison of volatility, correlation, and portfolio performance. International Review of Financial Analysis.

13- "These findings suggest that Bitcoin is traded as an alternative for a medium of exchange and a means of investment, being far from a commodity."

Kwon, J. (2020). Tail behavior of Bitcoin, the dollar, gold, and the stock market index. Journal of International Financial Markets, Institutions, and Money, 67, 101202.

14- "The results suggest that Bitcoin has characteristics that make it well-suited to work as a complement to emerging market currencies and that there are ways to minimize Bitcoin’s risks."

Carrick, J. (2016). Bitcoin as a Complement to Emerging Market Currencies. Emerging Markets Finance and Trade, 52, 2321 - 2334.

15- "The findings presented in this paper have important implications for financial market participants, policymakers, and researchers in light of projected increases in the adoption of Bitcoin, as well as the rapid development of cryptocurrency."

Zeng, T., Yang, M., & Shen, Y. (2020). Fancy Bitcoin and conventional financial assets: Measuring market integration based on connectedness networks. Economic Modelling, 90, 209-220.

16- "Abstract Bitcoin and the blockchain technology on which it is based are the key drivers behind the accelerated pace of the Fourth Industrial Revolution in the domain of Finance."

Su, C., Qin, M., Tao, R., & Umar, M. (2020). Financial implications of the fourth industrial revolution: Can Bitcoin improve prospects of energy investment? Technological Forecasting and Social Change, 158, 120178 - 120178.

17- "Bitcoin thereby possesses some of the same hedging abilities as gold and can be included in the variety of tools available to market analysts to hedge market-specific risk."

Dyhrberg, A. (2016). Hedging capabilities of bitcoin. Is it the virtual gold? Finance Research Letters, 16, 139-144.

18- "We further find that Bitcoin can be hedged against stocks, bonds, and SHIBOR and is a safe haven when extreme price changes occur in the monetary market."

Wang, G., Tang, Y., Xie, C., & Chen, S. (2019). Is Bitcoin a safe haven or a hedging asset? Evidence from China. Journal of Management Science and Engineering.

19- "In China, gold is a better portfolio diversifier than Bitcoin for risk-averse investors; however, for risk-seeking investors, Bitcoin can be a better choice."

Pho, K., Ly, S., Lu, R., Hoang, T., & Wong, W. (2021). Is Bitcoin a better portfolio diversifier than gold? A copula and sectoral analysis for China. International Review of Financial Analysis, 74, 101674.