Abstract:

The concept of virtual cryptocurrency, along with Bitcoin, began to attract attention in 2009 and has increased its popularity especially with the price rise in 2013. With Bitcoin, the first and the pioneer of virtual cryptocurrencies. Ethereum, which has the largest market value, is quite different in terms of its design structures and purposes. The Ethereum, designed to enable smart contracts to work on Bitcoin, designed to be a virtual currency, has also been a lot of attention attracted in the field of economics as in many areas and has been the subject of many studies in literature. The aim of this study is to compare the impact of the GDP of Turkey, the M2 definition and the money supply and consumer confidence index on the price of Bitcoin and Ethereum. For this purpose, two different models have been established that the prices of Bitcoin and Etherum vary depending on the Turkish Lira. The established models, using monthly data covering the period from January 2016 to December 2020, have been tested in a long-term framework of time-series analysis, using the Johansen Integration Test and the fully adjusted Smallest Frame Method (FMOLS). The analysis found that both Bitcoin and Ethereum’s Turkish Lira prices, GDP and consumer confidence index were positively linked to M2 cash supply. Another of the findings of the study is that Ethereum, which is lower than the total market value of Bitcoin, is more affected than all the variables. The results obtained coincide with the findings in the Master's thesis in which this study is derived and support each other.

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