The paper analyzes the impact of changes in U.S. monetary policy on Bitcoin prices. We find that a hypothetical unanticipated monetary tightening, which increases 1 bp on two-year Treasury yield, is associated with about a 0.25\% decrease in Bitcoin price on the Federal Open Market...

The bulk of cash is held for store of value purposes, with such holdings sharply increasing in times of high economic uncertainty and only a fraction of the population choosing to hoard cash. We develop a Diamond and Dybvig model with public money as a store of value and heterogeneous beliefs...