Safe haven or risky hazard? Bitcoin during the Covid-19 bear market

The Covid-19 bear market presents the first acute market losses since active trading of Bitcoin began. This market downturn provides a timely test of the frequently expounded safe haven properties of Bitcoin. In this paper, we show that Bitcoin does not act as a safe haven, instead decreasing in pri...

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Detalles Bibliográficos
Autores principales: Conlon, Thomas, McGee, Richard
Formato: Online Artículo Texto
Lenguaje:English
Publicado: The Authors. Published by Elsevier Inc. 2020
Materias:
Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7246008/
https://www.ncbi.nlm.nih.gov/pubmed/32550843
http://dx.doi.org/10.1016/j.frl.2020.101607
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author Conlon, Thomas
McGee, Richard
author_facet Conlon, Thomas
McGee, Richard
author_sort Conlon, Thomas
collection PubMed
description The Covid-19 bear market presents the first acute market losses since active trading of Bitcoin began. This market downturn provides a timely test of the frequently expounded safe haven properties of Bitcoin. In this paper, we show that Bitcoin does not act as a safe haven, instead decreasing in price in lockstep with the S&P 500 as the crisis develops. When held alongside the S&P 500, even a small allocation to Bitcoin substantially increases portfolio downside risk. Our empirical findings cast doubt on the ability of Bitcoin to provide shelter from turbulence in traditional markets.
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spelling pubmed-72460082020-05-26 Safe haven or risky hazard? Bitcoin during the Covid-19 bear market Conlon, Thomas McGee, Richard Financ Res Lett Article The Covid-19 bear market presents the first acute market losses since active trading of Bitcoin began. This market downturn provides a timely test of the frequently expounded safe haven properties of Bitcoin. In this paper, we show that Bitcoin does not act as a safe haven, instead decreasing in price in lockstep with the S&P 500 as the crisis develops. When held alongside the S&P 500, even a small allocation to Bitcoin substantially increases portfolio downside risk. Our empirical findings cast doubt on the ability of Bitcoin to provide shelter from turbulence in traditional markets. The Authors. Published by Elsevier Inc. 2020-07 2020-05-24 /pmc/articles/PMC7246008/ /pubmed/32550843 http://dx.doi.org/10.1016/j.frl.2020.101607 Text en © 2020 The Authors Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active.
spellingShingle Article
Conlon, Thomas
McGee, Richard
Safe haven or risky hazard? Bitcoin during the Covid-19 bear market
title Safe haven or risky hazard? Bitcoin during the Covid-19 bear market
title_full Safe haven or risky hazard? Bitcoin during the Covid-19 bear market
title_fullStr Safe haven or risky hazard? Bitcoin during the Covid-19 bear market
title_full_unstemmed Safe haven or risky hazard? Bitcoin during the Covid-19 bear market
title_short Safe haven or risky hazard? Bitcoin during the Covid-19 bear market
title_sort safe haven or risky hazard? bitcoin during the covid-19 bear market
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7246008/
https://www.ncbi.nlm.nih.gov/pubmed/32550843
http://dx.doi.org/10.1016/j.frl.2020.101607
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