“Shiny” crypto assets: A systemic look at gold-backed cryptocurrencies during the COVID-19 pandemic

Akanksha Jalan, Roman Matkovskyy and Larisa Yarovaya

International Review of Financial Analysis, 2021, vol. 78, issue C

Abstract: In this paper, we empirically analyse the performance of five gold-backed stablecoins during the COVID-19 pandemic and compare them to gold, Bitcoin and Tether. In the digital assets' ecosystem, gold-backed cryptocurrencies have the potential to address regulatory and policy concerns by decreasing volatility of cryptocurrency prices and facilitating broader cryptocurrency adoption. We find that during the COVID-19 pandemic, gold-backed cryptocurrencies were susceptible to volatility transmitted from gold markets. Our results indicate that for the selected gold-backed cryptocurrencies, their volatility, and as a consequence, risks associated with volatility, remained comparable to the Bitcoin. In addition, gold-backed cryptocurrencies did not show safe-haven potential comparable to their underlying precious metal, gold.

Keywords: Stablecoins; Cryptocurrencies; Gold-backed cryptocurrencies; COVID-19; Gold (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:78:y:2021:i:c:s1057521921002787

DOI: 10.1016/j.irfa.2021.101958

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