Bitcoin: competitor or complement to gold?

Jamal Bouoiyour (), Refk Selmi and Mark Wohar ()

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Abstract: This study seeks to address whether Bitcoin ever match or even replace gold as a safe haven. To this end, we use a dynamic Markov-switching copula model to test the complementarity and substitutability among Bitcoin and gold within two risk scenarios (i.e., low-and high-risk regimes). Our results reveal a positive and strong correlation between gold and Bitcoin returns coinciding with specific economic and political events. Gold and Bitcoin benefit from the same economic conditions. This suggests that gold and Bitcoin are likely to be complementary, rather than in competition with each other. Gold could act as a diversifier for investors in digital assets. But the Bitcoin have a lot to teach gold in terms of the efficient transfer of value.

Keywords: Testing for complementarity and substitution; Gold; Bitcoin; Markov-switching copula model (search for similar items in EconPapers)
Date: 2019-02-02
New Economics Papers: this item is included in nep-pay and nep-rmg
Note: View the original document on HAL open archive server: https://hal.science/hal-01994187v1
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Citations: View citations in EconPapers (18)

Published in Economics Bulletin, 2019, 39 (1), pp.186-191

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Journal Article: Bitcoin: competitor or complement to gold? (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01994187

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