**2. Literature Review**

Bitcoin is the most popular among the cryptocurrencies (Kyriazis 2019). Recent fluctuations in Bitcoin price has captured the attention of academic researchers (Beneki et al. 2019). Given the nescancy of this research stream, previous studies on Bitcoin and other digital currencies (for instance, Ethereum, Litecoin, Ripple) mainly explain the concepts, principles and economics of cryptocurrencies (Segendorf 2014; Dwyer 2015; Becker et al. 2011). Among the authors, Dwyer (2015) addressed the principles of Bitcoin and other relevant digital currencies. The author explains the supply and demand of digital currencies, equilibria of Bitcoin, uses of Bitcoin in exchange for goods and services with a rivalry to other currencies (Dwyer 2015). Likewise, Brière et al. (2015) investigated the connection of Bitcoin with other cryptocurrencies.

The total market cap of Bitcoin is approximately USD237 billion (as of 30 March 2018), which is nearly 42.69% of the entire cryptocurrency market capitalizations (coinmarketcap.com). As such, some studies consider the price dynamics of Bitcoin (Brandvold et al. 2015; Ciaian et al. 2016). Brandvold et al. (2015) investigated the price discovery of Bitcoin exchanges and find that two exchanges—Mt.Gox and BTC-e, are leading the market with the maximum information share. Besides, Ciaian et al. (2016) studied the underlying economics of Bitcoin price by taking into account the traditional determinants of the currency price. Moreover, Shubik (2014) and Rogojanu and Badea (2014) studied Bitcoin in the setting of alternative monetary systems by considering the challenges of the economic environment. Meanwhile, Bouoiyour and Selmi (2014); Bouoiyour et al. (2014) and Yermack (2013) described Bitcoin as a speculative investment or speculative bubble. Similarly, according to Yermack (2013), Bitcoin behaves more like a speculative investment rather than currency. It fails to satisfy the features of currency as a medium of exchange, a store of value, and a unit of account. In the same vein, Molnár et al. (2015) studied the exchange rate risk of Bitcoin by comparing with other variables, for instance, gold and Euro and find that Bitcoin is more volatile and riskier than gold and Euro, which restrict the applicability of Bitcoin as a medium of transaction. Furthermore, Bouri et al. (2017) investigated the Bitcoin price and its volatility and found persistence in the Bitcoin price and volatility.

As Bitcoin price volatility is exceptionally high, speculators have a general quest whether future Bitcoin price can be forecasted. Bitcoin price or return forecasting is getting more attention due to its boom-bust nature. Speculators are looking for tools and techniques that can forecast Bitcoin price with higher accuracy, at least better than the naïve forecast to set their investment portfolios in a profit margin. The majority of the studies on Bitcoin either focus on price returns and volatility or consider Bitcoin as a speculative investment or bubble (Bouoiyour and Selmi 2014; Bouoiyour et al. 2014; Yermack 2013). Some studies consider risk, hedge and safe haven attributes of Bitcoin and Ethereum (Beneki et al. 2019, Bouri et al. 2017). However, to the best of the authors' knowledge, there are no studies on the forecasting of test-sample (out-sample) Bitcoin price (Corbet et al. 2019). Thus, this study presents a novel approach to forecasting daily Bitcoin price using both with and without model re-estimation at each step while comparing ARIMA and NNAR models.
