Factors determining price volatility of cryptocurrencies

The purpose of this paper is to identify factors determining cryptocurrency price volatility. To achieve this goal, the following objectives were set: 1) analyse cryptocurrency functioning principles and risks they entail; 2) provide an overview of existing literature on cryptocurrency price volatility and identify its gaps; 3) formulate research methodology, 4) conduct study of factors determining cryptocurrency price volatility based on literature review and selected methodology, provide conclusions and recommendations. The study is conducted by applying classical linear regression model and ordinary least squares method. The study examines the effect of psychological-social, macroeconomic-regulatory and endogenous factors on the price of bitcoin. Based on the output of this paper, investors, analysts and portfolio managers should consider „Google Trends“ and „Baidu“ search tendencies, Shanghai Stock Exchange Composite Index, regulatory news, and the exchange rate of Argentinian peso against USD when considering investment in cryptocurrencies. However, it is equally important to note the role of cryptocurrencies as of speculative asset and consider the existence of potential financial bubble in this market