Exploring the dynamic nexus of traditional and digital assets in inflationary times: The role of safe havens, tech stocks, and cryptocurrencies

Konstantinos A. Dimitriadis, Demetris Koursaros and Christos S. Savva

Economic Modelling, 2025, vol. 151, issue C

Abstract: This study explores the dynamic interactions among traditional safe havens (gold), high-tech stocks, and cryptocurrencies (both non-green and green) during inflationary periods. It addresses a key gap in understanding the complementarity and substitutability of financial instruments when conventional currencies lose value. Using a Time-Varying Parameter Vector Autoregressive (TVP-VAR) model and dynamic network connectedness analysis, we identify three main findings: (1) Gold consistently behaves as a spillover absorber, reinforcing its role as a crisis hedge; (2) crisis-type does matter - non-green cryptocurrencies dominate during geopolitical shocks (e.g., the Russia–Ukraine war) which tend to be inflationary, while green cryptocurrencies gain prominence during non-inflationary health crises (e.g., COVID-19); (3) High-tech stocks and sectoral indices (e.g., Financials, Industrials); lead in stable periods, serving as modern portfolio anchors. These results suggest an ongoing financial evolution - from gold to green crypto - as newer digital assets demonstrate increasing resilience compared to traditional safe-haven assets in times of uncertainty.

Keywords: Tech stocks; Green cryptocurrencies; Sectoral indices; TVP-VAR; Network connectedness; Inflationary periods (search for similar items in EconPapers)
JEL-codes: G01 G12 G15 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:151:y:2025:i:c:s0264999325001907

DOI: 10.1016/j.econmod.2025.107195

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