How explosive are cryptocurrency prices?

Marc Gronwald*

*Corresponding author for this work

Research output: Working paperDiscussion paper

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This paper deals with explosiveness of four leading cryptocurrency prices: Bitcoin, Ether, XRP, and Litecoin. The main contribution is that this paper not only analyses the prices of these cryptocurrencies expressed in US Dollars, but also the price of the latter three expressed in Bitcoin. Evidence of explosive periods is found not only in all cryptocurrency prices in US Dollars, but also when XRP and Ether are expressed in Bitcoin. These latter periods, however, are found to be in the first half of 2016 and 2017, respectively, but not during the
price peak period of Bitcoin exhibited around the turn of the year 2017/2018. Whether or not these explosive periods can be interpreted as cryptocurrency bubbles requires a sufficient understanding of the fundamental value of cryptocurrencies. This paper draws a parallel to the discussion on the fundamental value of at money according to which it is essential whether or not money is used for transactions or as speculative object. As long it is unclear what fundamental value of cryptocurrencies is, the term bubble should be used with more caution.
Original languageEnglish
PublisherUniversity of Aberdeen
Number of pages14
Publication statusPublished - 29 Feb 2020

Publication series

NameDiscussion Papers in Economics and Finance
PublisherUniversity of Aberdeen
ISSN (Electronic)0143-4543

Bibliographical note

The author gratefully acknowledges useful comments by Beat Hintermann, Xin Jin, as well as participants of the 18th Journees LAGV - International Conference in Public Economics. Furthermore, the author is indebted to Sandrine Ngo for motivating me to study the economics of Bitcoins.


  • Cryptocurrencies
  • Bubbles
  • explosiveness
  • fundamental value
  • intrinsic value
  • fiat money


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