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

Akanksha Jalan, Roman Matkovskyy and Larisa Yarovaya
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Akanksha Jalan: ESC [Rennes] - ESC Rennes School of Business

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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: 2021-11
Note: View the original document on HAL open archive server: https://rennes-sb.hal.science/hal-03512893
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Citations: View citations in EconPapers (11)

Published in International Review of Financial Analysis, 2021, 78, pp.101958. ⟨10.1016/j.irfa.2021.101958⟩

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Journal Article: “Shiny” crypto assets: A systemic look at gold-backed cryptocurrencies during the COVID-19 pandemic (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03512893

DOI: 10.1016/j.irfa.2021.101958

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