The Research Of Issue And Circulation Mechanisems And Price Fluctuations Of Bitcoin

At the end of2013, the central bank of China issued a policy named Notice ForPreventing the Risks of Currency, which has a great impact on the price of Bitcoinand made more and more people notice this new-born currency. It is meaningful todiscuss how bitcoin will effect the financial system as a kind of virtual currency andhow the future of bitcoin will be. In addition, the influence and applicability of bitcoindesign concept is a problem to be solved. In this article, I analyzed2parts of bitcoin:the monetary attribute and the price fluctuations. In the first part, the Theoretical basis,release mechanism and the circulation industry chain is discussed firstly. Then thebitcoin is compared with some other currencies. Lastly I analyzed the five currencyfunctions of bitcoin. In the second part, Granger causality test, impulse responseanalysis and variance decomposition is used to analyze the influence factor of bitcoinprice, such as gold price, crude oil price, exchange rate, equity index and interest rate.