Macro Determinants of Cryptocurrency Ownership: A Case Study of Bitcoin

Cryptocurrencies are disrupting the finance industry and influencing monetary policies across various countries, leading to increased concerns for governments, central banks, and international institutions. This paper presents an original investigation into the macro determinants of cryptocurrency ownership, with a specific focus on Bitcoin. Employing panel data analysis, the study covers 84 countries from 2010 to 2020. The study tackles the challenge of data limitations stemming from the anonymity of blockchain technology by using Bitcoin Client Software Downloads as a proxy for cryptocurrency ownership. The findings reveal several key factors. First, Bitcoin’s price evolution plays a crucial role in enhancing its appeal, highlighting its role as an attractive asset for high returns and profit-seeking. Second, monetary freedom, reflecting sound monetary policy, acts as a deterrent to the ownership of cryptocurrencies. Third, political stability emerges as a critical driver, with countries exhibiting greater stability more likely to engage in cryptocurrency ownership. Additionally, gross domestic product per capita shows a positive impact, suggesting that wealthier nations with greater financial resources are more inclined to own cryptocurrencies, indicating economic affluence as a facilitator of cryptocurrency engagement.