Does Bitcoin Have the Right Monetary Rule?

10 Pages Posted: 23 Feb 2018 Last revised: 15 Jun 2018

Nicolas Cachanosky

Metropolitan State University of Denver; American Institute for Economic Research

Date Written: February 15, 2018


The growing literature on Bitcoin can be divided in two groups. One performs an economic analysis of Bitcoin focusing on its monetary characteristics. The other one looks takes a financial look at the price of Bitcoin. Interestingly, both of these groups have not given much more than passing comments to the problem whether or not Bitcoin has the right monetary rule. This paper argues that Bitcoin in particular, and cryptocurrencies in general, do not have a good monetary rule, and that this shortcoming seriously limits its prospect of becoming a well-established currency.

Keywords: Bitcoin, monetary rules, nominal income targeting

JEL Classification: E42, E51

Suggested Citation

Cachanosky, Nicolas, Does Bitcoin Have the Right Monetary Rule? (February 15, 2018). Available at SSRN: or

Nicolas Cachanosky (Contact Author)

Metropolitan State University of Denver ( email )

Denver, CO 80217
United States


American Institute for Economic Research

PO Box 1000
Great Barrington, MA 01230
United States

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