Economic Policy Uncertainty and Cryptocurrency Market as a Risk Management Avenue: A Systematic Review

Inzamam Ul Haq, Apichit Maneengam, Supat Chupradit, Wanich Suksatan and Chunhui Huo
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Inzamam Ul Haq: Department of Management Sciences, Comsats University Islamabad, Islamabad 45550, Pakistan
Apichit Maneengam: Department of Mechanical Engineering Technology, College of Industrial Technology, King Mongkut’s University of Technology North Bangkok, Wongsawang, Bangsue, Bangkok 10800, Thailand
Supat Chupradit: Department of Occupational Therapy, Faculty of Associated Medical Sciences, Chiang Mai University, Chiang Mai 50200, Thailand
Wanich Suksatan: Faculty of Nursing, HRH Princess Chulabhorn College of Medical Science, Chulabhorn Royal Academy, Bangkok 10210, Thailand
Chunhui Huo: Asia-Australia Business College, Liaoning University, Shenyang 110036, China

Risks, 2021, vol. 9, issue 9, 1-24

Abstract: Cryptocurrency literature is increasing rapidly nowadays. Particularly, the role of the cryptocurrency market as a risk management avenue has got the attention of researchers. However, it is an immature asset class and requires gaps in current literature for future research directions. This research provides a systematic review of the vast range empirical literature based on the cryptocurrency market as a risk management avenue against economic policy uncertainty (EPU). The review discovers that cryptocurrencies have mixed connectedness patterns with all national EPU therefore, the risk mitigation ability varies from country to country. The review finds that heterogeneous correlation patterns are due to the dependence of EPU on the policies and decisions usually taken by regulatory authorities of a particular country. Additionally, heterogeneous EPU requires heterogeneous solutions to deal with stock market volatility and economic policy uncertainty in different economies. Likewise, the divergent protocol and administration of currencies in the crypto market consequently vicissitudes the hedging and diversification performance against each economy. Many research lines can benefit investors, policymakers, fund managers, or portfolio managers. Therefore, the authors suggested future research avenues in terms of topics, data frequency, and methodologies.

Keywords: systematic analysis; cryptocurrency; economic policy uncertainty; hedge; safe-haven; diversifier; COVID-19 (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jrisks:v:9:y:2021:i:9:p:163-:d:630889

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