COMPARATIVE ANALYSIS OF CRYPTOCURRENCY MARKET DYNAMICS AND MACROECONOMIC INDICATORS: THE RELATIONSHIP BETWEEN BITCOIN PRICE, MONEY SUPPLY AND INFLATION IN UKRAINE AND EASTERN EUROPE
DOI:
https://doi.org/10.31732/2663-2209-2025-79-114-127Abstract
This article provides a comparative analysis of the dynamics of the cryptocurrency market and Ukraine’s macroeconomic indicators for the period 2019–2024. The research is based on the application of statistical methods, elements of econometric modeling, time series analysis, large data visualization, and correlation modeling using Python tools. The study is grounded in open-source data from authoritative international platforms, including CoinGecko, Federal Reserve Economic Data (FRED), the National Bank of Ukraine (NBU), and Eurostat API.
The relevance of this study lies in the growing role of cryptocurrencies in the global economy and the need to reconsider traditional approaches to monetary policy under conditions of financial digitalization. The focus of the analysis is on the interrelationship between the price of Bitcoin, the dynamics of monetary aggregates (specifically M3), and the consumer price index (CPI) in Ukraine. The dynamics of stock market indices are considered as an external macro-financial trigger, with the S&P500 index used as a benchmark for external economic influence on the crypto market.
The methodological framework is based on monthly frequency data processing, trend smoothing (moving averages), time series normalization, correlation analysis, and cross-country comparison. Particular attention is paid to visualizing data through graphs, allowing the identification of lag effects, cyclicality, and synchronization trends between the crypto market and monetary indicators. The study also explores the level of connection between Bitcoin and the M3 monetary aggregate, between Bitcoin and the S&P500 index, as well as between M3 and inflation.
The results confirm a high degree of volatility in the value of Bitcoin, with peak periods in early 2021 and decline phases in 2022–2023. Correlation analysis showed a weak positive relationship between Bitcoin and the S&P500 index and dynamic dependencies between the volume of money supply and inflation. The normalized comparison between BTC and M3 revealed potential periods of lagged interaction. Moreover, cross-country analysis revealed asymmetry in the economic reactions of Eastern European countries to macroeconomic shocks.
The practical significance of this research lies in the development of an algorithmic system for evaluating the interaction between digital assets and macroeconomic variables. The proposed approach may be used for future scenario modeling and assessing the resilience of monetary policy to digital shocks. The results can be valuable to the National Bank of Ukraine, the Ministry of Finance, and analytical institutions evaluating the country's financial stability in the context of digital transformation.
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