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Any port in a storm: cryptocurrency safe-havens during the COVID-19 pandemic

Corbet, Shaen orcid logoORCID: 0000-0001-7430-7417, Hou, Yang (Greg) orcid logoORCID: 0000-0003-0017-9912, Hu, Yang, Larkin, Charles orcid logoORCID: 0000-0002-0352-2504 and Oxley, Les orcid logoORCID: 0000-0003-3621-2323 (2020) Any port in a storm: cryptocurrency safe-havens during the COVID-19 pandemic. Economics Letters, 194 . ISSN 0165-1765

Controlling for the polarity and subjectivity of social media data based on the development of the COVID-19 outbreak, we analyse the relationships between the largest cryptocurrencies and such time-varying realisation as to the scale of the economic shock centralised within the rapidly escalating pandemic. We find evidence of significant growth in both returns and volumes traded, indicating that large cryptocurrencies acted as a store of value during this period of exceptional financial market stress. Further, cryptocurrency returns are found to be significantly influenced by negative sentiment relating to COVID-19. While not only providing diversification benefits for investors, results suggest that these digital assets acted as a safe-haven similar to that of precious metals during historic crises.
Item Type:Article (Published)
Additional Information:Article number: 109377
Uncontrolled Keywords:COVID-19; Pandemic; Sentiment; Cryptocurrency; Safe-haven; Financial crisis
Subjects:Business > Finance
DCU Faculties and Centres:DCU Faculties and Schools > DCU Business School
Official URL:https://dx.doi.org/10.1016/j.econlet.2020.109377
Copyright Information:© 2021 Elsevier. Open Access (CC-BY-4.0)
ID Code:25985
Deposited On:09 Jun 2021 15:26 by Thomas Murtagh . Last Modified 09 Jun 2021 15:26

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