Assessing the viability of bitcoin as a currency and an alternative investment

Sammanfattning: Intrigued by bitcoin's exceptional value development and media attention, we assess its viability as a currency and an alternative investment. First, we perform a statistical analysis of historical financial data on bitcoin and compare with traditional currencies, commodities and securities. Second, we analyse the relationship between bitcoin's value development and investor sentiment, using the largest online bitcoin forum as proxy. Third, we conduct interviews with industry experts to deepen the analysis. We conclude that bitcoin seems to exhibit features more similar to an alternative asset than a traditional currency. However, whether bitcoin will function as a currency or an alternative investment going forward depends on conflicting forces; it seems that the features that make bitcoin an attractive investment are also the factors that impede the functionality of bitcoin as a currency, and vice versa. In either case, the societal and user value introduced by bitcoin holds promise for its future viability.