Any port in a storm: Cryptocurrency safe-havens during the COVID-19 pandemic
Shaen Corbet (),
Hou, Yang (Greg),
Charles Larkin () and
Les Oxley ()
Economics Letters, 2020, vol. 194, issue C
Controlling for the polarity and subjectivity of social media data based on the development of the COVID-19 outbreak, we analyse the relationships between the largest cryptocurrencies and such time-varying realisation as to the scale of the economic shock centralised within the rapidly-escalating pandemic. We find evidence of significant growth in both returns and volumes traded, indicating that large cryptocurrencies acted as a store of value during this period of exceptional financial market stress. Further, cryptocurrency returns are found to be significantly influenced by negative sentiment relating to COVID-19. While not only providing diversification benefits for investors, results suggest that these digital assets acted as a safe-haven similar to that of precious metals during historiccrises.
Keywords: COVID-19; Pandemic; Sentiment; Cryptocurrency; Safe-haven; Financial crisis (search for similar items in EconPapers)
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