Factor Analysis of the Fundamental Value of Cryptocurrencies

Student: Abragimovich Vladimir

Supervisor: Gleb Garashchuk

Educational Programme: Economics and Statistics (Bachelor)

Year of Graduation: 2024

The objective of this study is to analyze the factors affecting the cost of cryptocurrencies, specifically Bitcoin, and to identify the most significant ones. Part of the study is dedicated to a review of existing literature and a description of some theory, after which a linear regression is constructed, and the principal component method is used. Key findings include the funding rate, miner fees, gold price, S&P 500 index, Federal Reserve rate, and exchange trading volume as factors that significantly influence the price of Bitcoin. The results of this study should provide a foundation for developing future trading strategies based on factor analysis not only for Bitcoin but also for other cryptocurrencies.

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