Can altcoins act as hedges or safe-havens for Bitcoin?

Yi Li, Brian Lucey and Andrew Urquhart

Finance Research Letters, 2023, vol. 52, issue C

Abstract: Bitcoin remains the most popular cryptocurrency and has attracted significant research attention, especially in the hedging and safe-haven literature. As many investors in bitcoin are concentrated heavily in cryptocurrencies as opposed to other assets, a question arises whether alternative cryptocurrencies (altcoins) can used as safe-havens and hedges against Bitcoin? We find that only meme coins offer hedging benefits but a wider range – Defi, meme coins, smart contracts, metaverse and privacy cryptocurrencies – can all act as safe-havens against bitcoin. We further show that their ability to act as hedges and safe-havens varies depending on whether the market is in a bubble or non-bubble period.

Keywords: Bitcoin; Hedge; Safe-haven; DeFI; Cryptocurrencies (search for similar items in EconPapers)
JEL-codes: G12 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322005372

DOI: 10.1016/j.frl.2022.103360

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