Speculative bubbles in Bitcoin markets? An empirical investigation into the fundamental value of Bitcoin

•The current market value of the bitcoin market is currently estimated to be around $3.3 billion.•Bitcoins prices contain a considerable speculative component.•Bitcoin markets are susceptible to bubbles.•The fundamental value of bitcoin is zero.

Amid its rapidly increasing usage and immense public interest the subject of Bitcoin has raised profound economic and societal issues. In this paper we undertake economic and econometric modelling of Bitcoin prices. As with many asset classes we show that Bitcoin exhibits speculative bubbles. Further, we find empirical evidence that the fundamental price of Bitcoin is zero.