The Diffusion Process of Bitcoin

This article reports the results of an investigation of the diffusion of cryptocurrencies. The Bass diffusion model is used to estimate the diffusion patterns of Bitcoin. In addition, the size and time intervals of adopter categories are examined. The unit of analysis is quarterly data of new wallets. The data covered 37 quarterly observations for the periods from the last quarter of 2011 to the second quarter of 2020. The parameters of the Bass model are estimated through Ordinary Least Squares (OLS) estimations. The diffusion curve of Bitcoin is developed based on the estimated parameters. The results indicate that the diffusion of Bitcoin has passed early adoption and takeoff periods and is close to maturity. The estimated diffusion process indicates that innovators, early adopters, early majority, late majority, and laggards had adopted Bitcoin. The findings may guide communication decisions with different types of investors and government regulation plans.