THE EFFECTS ON U.S. IMPORTATION: RISE OF CRYPTOCURRENCY AND TRADITIONAL CURRENCIES

Objective: This paper aims to investigate both short and long run interactions between the U.S. Imports, Bitcoin, Gold, and U.S. Dollar by applying monthly data from January of 2011 to December of 2023. Theoretical Framework: The United States has been experiencing trade deficit for the past several years. Hence, prices of cryptocurrency and traditional currencies are also increasing that may serve a connection with the increasing trade deficit. Method: This study utilized Unit Root, Auto-Regressive Distributed Lag (ARDL), and Granger Causality to examine the relationship between all the variables. Results and Discussion: The results of this study revealed that the U.S. Dollar has a positive relationship with the increasing U.S. Imports in the short run while the rest of the variables are insignificant. Notably, Bitcoin revealed a positive significant relationship with U.S. Imports in the long run while the rest of the variables remained insignificant. Research Implications: This study has implied that the rise cryptocurrency mainly Bitcoin and traditional currencies specifically the U.S. Dollar and Gold has an implication with the current trade deficit being faced in the United States. Originality/Value: This study unraveled the implications of cryptocurrency and traditional currencies to a macroeconomic variable, specifically imports. Furthermore, this study wishes to contribute within the field of cryptocurrency as it can change the system of financial technology and its relationship with traditional currencies implying a greater impact for the global economy, as it is showing great potential for the future of finance with its global adoption.