Blockchain Revolution and Ethereum

Identifier:  TFG:2007

Handle: https://hdl.handle.net/20.500.11797/TFG2007

Authors:  Civit Roig, Oriol

Abstract:
Due to the severe financial crisis in 2008 many individuals lost confidence in the financial institutions and capital markets. In this context Bitcoin appeared and later in 2015 Vitalik Buterin created Ethereum, which is a modern platform with the ability to make payments and smart contracts. In this paper, an analysis of the current situation is made by exposing its pros and cons. It is an attempt to explain its operation, provide arguments to which markets this trend can grow and the obstacles it will have to be overcome. In the empirical section, two quantitative studies have been conducted with the VAR econometric model. One with data from some global indices that have been considered and Ethereum. The other VAR model is made with the exchange rates of some currencies with both Ethereum and Bitcoin. The main hypothesis is that if cryptocurrencies become important in the world of finance, it is expected that traditional investments will be related to Ethereum and there will be effects between them. In the resolution of the models, two possible answers have been concluded. In the VAR model of the world indexes, the results show that there is no relationship between the variables proposed. Then, it is stated that cryptocurrencies are a temporary market and it is expected that their future will not be of long duration. In the other model proposed based on exchange rates, a relationship has only been observed between Ethereum and Bitcoin. The second model shows that it is an independent market and its investments are not influenced by currencies.