Abstract

Bitcoin is seen to be making its way into the various economies. Bitcoin is a different type of currencies in that it does not have a central authority. Some believe it is a bubble which has brought controversy throughout different financial markets. However, it has gained popularity globally which increased its usage in real transactions daily. Countries such as Venezuela and Zimbabwe, whose currencies have suffered crippling inflation, have resorted to Bitcoin as their mode of currency for daily livelihood. We will investigate the transactional drivers of bitcoin using wavelet analysis, specifically wavelet coherence, which will ultimately help us understand the long- and short-term effect. Wavelet analysis is a relatively new method used to decompose signals (data points) to gain as much information as possible. In the first two chapters, we will be looking at the mathematical foundation that led to the creation of wavelet analysis. In our last few chapters, we will explore the wavelet analysis and apply it to find the relationship between transactional drivers and market price of Bitcoin and its effect on real transactions. Our wavelet model is an extension of the model done by Ladislav Kristoufek.

Advisor

Ramsay, John

Department

Mathematics

Disciplines

Other Applied Mathematics

Keywords

Bitcoin, Wavelet Analysis, Fourier series, Fourier Transform

Publication Date

2019

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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© Copyright 2019 Christian Betre