Cryptocurrency as a Safe Haven for Investment Portfolios Amid COVID-19 Panic Cases of Bitcoin, Ethereum and Litecoin
| dc.contributor.author | Marobhe, M.I | |
| dc.date.accessioned | 2022-03-16T09:38:21Z | |
| dc.date.available | 2022-03-16T09:38:21Z | |
| dc.date.issued | 2021 | |
| dc.description.abstract | Purpose – This article examines the susceptibility of cryptocurrencies to coronavirus disease 2019 (COVID-19) induced panic in comparison with major stock indices. Design/methodology/approach – The author employs the Bayesian structural vector autoregression to examine the phenomenon in Bitcoin, Ethereum and Litecoin from 2nd January 2020 to 30th June 2021. A similar analysis is conducted for major stock indices, namely S&P 500, FTSE 100 and SSE Composite for comparison purposes. Findings – The results suggest that cryptocurrencies returns suffered immensely in the early days of the COVID-19 outbreak following declarations of the disease as a global health emergency and eventually a pandemic in March 2020. However, the returns for all three cryptocurrencies recovered by April 2020 and remained resistant to further COVID-19 panic shocks. The results are dissimilar to those of S&P 500, FTSE 100 and SSE Composite values which were vulnerable to COVID-19 panic throughout the timeframe to June 2021. The results further reveal the strong predictive power of Bitcoin on the prices of other cryptocurrencies. Research limitations/implications – The article provides evidence to support the cryptocurrency as a safe haven during the COVID-19 school of thought given their resistance to subsequent shocks during COVID-19. Thus, the author stresses the need for diversification of investment portfolios by including cryptocurrencies given their uniqueness and resistance to shocks during crises. Originality/value – The author makes use of the novel coronavirus panic index to examine the magnitude of shocks in prices of cryptocurrencies during COVID-19. | en_US |
| dc.identifier.citation | Marobhe, M. I. (2021). Cryptocurrency as a safe haven for investment portfolios amid COVID-19 panic cases of Bitcoin, Ethereum and Litecoin. China Finance Review International.12(1) 51-68 | en_US |
| dc.identifier.issn | 2044-1398 | |
| dc.identifier.uri | https://repository.tia.ac.tz/handle/123456789/56 | |
| dc.language.iso | en | en_US |
| dc.publisher | China Finance Review International | en_US |
| dc.subject | Cryptocurrency, COVID-19, Stock markets, Bitcoin | en_US |
| dc.title | Cryptocurrency as a Safe Haven for Investment Portfolios Amid COVID-19 Panic Cases of Bitcoin, Ethereum and Litecoin | en_US |
| dc.type | Article | en_US |