**Author details**

variance and average price movement for a security is determined. These are the building blocks of a Monte Carlo simulation. The horizontal spool in **Figure 7** delegates trace periods of the response function, and the vertical spool delegates responses of dependent variables

1 2 3 4 5 6 7 8 9 10

Response of VOL to VOL

2 3 4 5 6 7 8 9 10

Response of CAP to VOL

3 4 5 6 7 8 9 10

Response to Cholesky One S.D. Innovations ± 2 S.E. Response of BTC to VOL

0 40,000,000

0 -200,000,000

1

200,000,000 400,000,000 600,000,000 800,000,000

1,000,000,000

1

80,000,000 120,000,000

160,000,000

1 2 3 4 5 6 7 8 9 10

Response of VOL to CAP

2 3 4 5 6 7 8 9 10

Response of CAP to CAP

2 3 4 5 6 7 8 9 10

Response of BTC to CAP

In an era where having a smart phone is highly more likely than having a Bank account, Bitcoin is here to stay. The architecture of money that we live in today brings the borrower and lender together through a financial intermediary, usually a Bank. One of the parties usually conforms to the rules and regulations put forth by the financial institution making it the most sought-after financial product the banks have to offer. People with limited education and a profile not matching to open a bank account can open a Bitcoin account in under

As of June 2017, the total value of all cryptocurrency in circulation is now [14] almost \$100 bn.

to independent variables.

30 seconds.

0 40,000,000

0

1 2


200,000,000 400,000,000 600,000,000 800,000,000

1,000,000,000

1

80,000,000 120,000,000

160,000,000

1 2 3 4 5 6 7 8 9 10

Response of VOL to BTC

2 3 4 5 6 7 8 9 10

Response of CAP to BTC

3 4 5 6 7 8 9 10

**Figure 7.** Impulse response functions—Monte Carlo simulation.

Response of BTC to BTC

278 Financial Management from an Emerging Market Perspective

0 40,000,000

0 -200,000,000

1 2

200,000,000 400,000,000 600,000,000 800,000,000

1,000,000,000

1

80,000,000 120,000,000

160,000,000

**4. Bitcoin and the future economy**

Bitcoin is Gold 2.0 because Bitcoin is great as a store of value.

Asma Salman\* and Muthanna G. Abdul Razzaq \*Address all correspondence to: asma.salman@aue.ae American University in the Emirates (AUE), Dubai, United Arab Emirates (UAE)
