Panagiotis Makris

Hellenic Open University, Greece

Petros Lois

University of Nicosia, Cyprus, School of Business

Spyros Repousis[1]

University of Nicosia, Cyprus, School of Business

Abstract

Purpose: This study investigates the key macroeconomic, behavioral, and cryptocurrency-specific determinants of monthly Bitcoin price fluctuations over the period January 2014 to December 2024. It aims to provide empirical insights into Bitcoin's evolving role within global financial markets, considering both traditional market indicators and investor sentiment.

Design/methodology/approach: Using a time-series econometric approach, the study employs an Ordinary Least Squares (OLS) regression model on a balanced monthly dataset comprising Bitcoin price, trading volume, Google Trends, the S&P 500 index, and the EUR/USD exchange rate. Stationarity and diagnostic tests are conducted to ensure model robustness. Interaction terms and lag structures are included to capture delayed or compounding effects.

Findings: The results reveal that Bitcoin prices exhibit a strong and statistically significant co-movement with the S&P 500 index, suggesting a growing alignment with equity markets. Google Trends—a proxy for public interest—shows a marginally significant influence, indicating the relevance of retail investor sentiment. Conversely, Bitcoin trading volume and the EUR/USD exchange rate do not significantly affect price movements within the sample period. The findings highlight Bitcoin's sensitivity to macro-financial conditions and investor psychology rather than conventional liquidity or currency dynamics.

Research limitations/implications: The study is limited to monthly data, which may overlook short-term shocks and intramonth volatility. Proxy variables such as Google Trends offer only partial insight into complex behavioral phenomena. Future research should explore high-frequency data and incorporate more granular sentiment and policy metrics.

Practical implications: The demonstrated relationship between Bitcoin and the S&P 500 suggests that Bitcoin may not serve as an effective hedge during equity market downturns. Investors and portfolio managers should account for its risk-on behavior in asset allocation. Regulators and policymakers should consider Bitcoin’s increasing integration with traditional markets when designing oversight frameworks.

Originality/value: This study offers a novel, interdisciplinary analysis of Bitcoin price dynamics by simultaneously accounting for macroeconomic, behavioral, and market-specific variables. It contributes to both academic understanding and practical decision-making regarding the financialization and regulation of digital assets.

[1] E-mail contact: repousis.s@unic.ac.cy