On the Value of Virtual Currencies

@article{Bolt2019OnTV,
  title={On the Value of Virtual Currencies},
  author={Wilko Bolt and Maarten R.C. van Oordt},
  journal={ERN: Asset Pricing Models (Topic)},
  year={2019}
}
This paper develops an economic framework to analyze the exchange rate of virtual currency. Three components are important. First, the current use of virtual currency to make payments. Second, the decision of forward-looking investors to buy virtual currency (thereby effectively regulating its supply). Third, the elements that jointly drive future consumer adoption and merchant acceptance of virtual currency. The model predicts that, as virtual currency becomes more established, the exchange… 

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