Holding Bitcoin longer: The dynamic hedging abilities of Bitcoin

Are Bitcoin and Ethereum safe-havens for stocks during the COVID-19 pandemic?

“…As the pioneer, Bitcoin has increased in value from nearly $0 in October 2009 to more than $7,000 in April 2020 ( CoinMarketCap.com, 2020 ). Chan et al (2019) state that the dramatic Bitcoin price increase in December 2017 is pivotal to determine its hedging abilities. According to Bouri, Molnár, Azzi, Roubaud, & Hagfors (2017) , an asset is a weak (strong) hedge if it is uncorrelated (negatively correlated) with another asset on average.…”

Cryptocurrency market contagion: Market uncertainty, market complexity, and dynamic portfolios

“…Investigating emerging stock markets, Guesmi et al (2018) reach the conclusion that Bitcoin constitutes an effective diversifier even within a portfolio that already includes commodities such as gold or oil. Chan et al (2018) illustrate Bitcoin's hedging usefulness vis-a-vis a number of stock indices; namely, Euro STOXX, Nikkei, Shanghai A-Sharpe, S&P 500, as well as, the TSX Index. Furthermore, evidence of different characteristics between the Bitcoin, gold and the USD is presented in the work of Baur et al (2018a).…”

The Cost of Bitcoin Mining Has Never Really Increased

“…Bitcoin is a digital currency launched in 2009 by an anonymous inventor or group of inventors under the alias of Satoshi Nakamoto (Nakamoto, 2019). It is the largest cryptocurrency in market capitalization with over 100 billion dollars (Chan et al, 2019;Grobys and Sapkota, 2019;Blockchain.com, 2020). As a decentralized currency, Bitcoin differs from government regulated fiat currencies in that there exists no central authority within the network to verify transactions and prevent frauds and attacks (Sin and Wang, 2017).…”