NDLI: Bitcoin: An inflation hedge but not a safe haven.

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Bitcoin: An inflation hedge but not a safe haven.

Content Provider	Europe PMC
Author	Choi, Sangyup Shin, Junhyeok
Copyright Year	2021
Abstract	During the recent COVID-19 pandemic, many commonalities shared by Bitcoin and gold raise the question of whether Bitcoin can hedge inflation or provide a safe haven as gold often does. By estimating a Vector Autoregression (VAR) model, we provide systematic evidence on the relationship among inflation, uncertainty, and Bitcoin and gold prices. Bitcoin appreciates against inflation (or inflation expectation) shocks, confirming its inflation-hedging property claimed by investors. However, unlike gold, Bitcoin prices decline in response to financial uncertainty shocks, rejecting the safe-haven quality. Interestingly, Bitcoin prices do not decrease after policy uncertainty shocks, partly consistent with the notion of Bitcoin's independence from government authorities. We also find an interesting asymmetry in the drivers of Bitcoin price dynamics between the bullish and bearish market. The main findings hold with or without the COVID-19 pandemic episode.
Related Links	https://europepmc.org/backend/ptpmcrender.fcgi?accid=PMC8995501&blobtype=pdf
ISSN	15446123
Journal	Finance Research Letters [Financ Res Lett]
Volume Number	46
DOI	10.1016/j.frl.2021.102379
PubMed Central reference number	PMC8995501
PubMed reference number	35431672
e-ISSN	15446131
Language	English
Publisher	Elsevier Inc.
Publisher Date	2021-08-16
Access Restriction	Open
Rights License	Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active. © 2021 Elsevier Inc. All rights reserved.
Subject Keyword	Cryptocurrencies Bitcoin Inflation-hedging Safe-haven Gold COVID-19
Content Type	Text
Resource Type	Article
Subject	Finance

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