Economics of bitcoin

For broader coverage of this topic, see Bitcoin and Cryptocurrency.

Bitcoin was designed by its pseudonymous inventor, Satoshi Nakamoto, to work as a currency, but its status as a currency is disputed. Economists define money as a store of value, a medium of exchange and a unit of account, and agree that bitcoin does not currently meet all these criteria.

Over the past decade, Bitcoin has evolved from a niche digital experiment to an increasingly integrated component of global financial markets and the broader economy. This transformation has been marked by growing institutional adoption, with major corporations adding Bitcoin to their balance sheets and traditional financial institutions offering cryptocurrency services. Research has documented significant interconnections between Bitcoin prices and both financial market fluctuations and macroeconomic indicators, suggesting that cryptocurrency markets are no longer isolated from conventional economic systems. This integration has profound implications for monetary policy, financial stability, and risk management, as Bitcoin's market movements increasingly correlate with traditional asset classes during periods of market stress.

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