A MULTIPLE LINEAR REGRESSION MODEL FOR CRYPTOCURRENCY PRICE IN THE FINANCIAL ANALYSIS AND ACCOUNTING

Abstract

The cryptocurrency market is represented by more than 6,099 different cryptocurrencies with a total market capitalization of USD 354,316 million with Bitcoin dominance over 60%. Despite the increasing amount of scientific research, a comprehensive analysis of factors influencing the price of cryptocurrency is still needed. Previous studies have focused on the Bitcoin capitalization changes, rather than relationships and dependencies between the price of different cryptocurrencies and other factors. The author proposed a multiple linear regression model, which can be used for the cryptocurrency price forecast. The author tested the hypothesis, that Bitcoin's closing price changes likely in response to changes in altcoin prices and Google search index as well. According to the conducted research, the price of Bitcoin depends significantly on Google's search index on the specific cryptocurrency name. The revealed multiple regression equation can be further used for creating operational analytical programs for forecasting the price movement of Bitcoin.