Is digital gold a hedge, safe haven, or diversifier? An analysis of cryptocurrencies, DeFi tokens, and NFTs

Youcef Maouchi, Mohamed Fakhfekh, Lanouar Charfeddine and Ahmed Jeribi

Applied Economics, 2024, vol. 56, issue 60, 9158-9173

Abstract: The crypto assets market is growing rapidly, exposing investors to new risks. As a result, finding viable candidates to hedge and diversify crypto portfolios is a critical and timely topic. In this paper, we explore the potential of gold-backed cryptocurrencies as safe haven assets in the context of building a diversified digital assets portfolio. Empirically, we investigate the financial properties (diversification, safe haven, and hedging capabilities) of two gold-backed cryptocurrencies against the three main digital assets categories, i.e. traditional cryptocurrencies, Non-Fungible Tokens (NFTs), and Decentralized Finance (DeFi) tokens, considering major external and internal crises. We also estimate the hedge ratios and the hedging effectiveness of the considered pairs. Overall, our findings indicate that the examined gold-backed cryptocurrencies are good diversifiers, with varying hedging, and safe haven properties depending on the nature of the crises, such as the COVID-19 pandemic and the Russia–Ukraine War, as well as the digital asset category considered. Several financial implications for investors and policymakers are proposed and discussed.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2023.2299217 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:56:y:2024:i:60:p:9158-9173

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2023.2299217

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().