Pandemic Versus Financial Shocks: Comparison of Two Episodes on the Bitcoin Market

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F21%3A43922234" target="_blank" >RIV/62156489:43110/21:43922234 - isvavai.cz</a>

Výsledek na webu

<a href="https://doi.org/10.3790/aeq.67.2.113" target="_blank" >https://doi.org/10.3790/aeq.67.2.113</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.3790/aeq.67.2.113" target="_blank" >10.3790/aeq.67.2.113</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Pandemic Versus Financial Shocks: Comparison of Two Episodes on the Bitcoin Market

Popis výsledku v původním jazyce

With its rising popularity, the Bitcoin has also become increasingly independent from global financial markets. Recently, it has joined the class of alternative assets. We use the newly developed wavelet methodology to analyze daily data to compare the COVID-19 pandemic at the beginning of 2020 with the bear market episode at the end of 2018. In both cases, attention signals and a general panic are the main drivers of the Bitcoin fluctuations. We show that the Bitcoin&apos;s dynamic is more complex than the dynamics of standard financial assets. The Bitcoin is, on the one hand, subject to pandemic shocks but also represents an important source of attention signals. On the other hand, because the Bitcoin additionally reacts on an emotional basis, it might react faster than other assets and thus creates a market signal itself. Moreover, we identify short cycles (of several days), which may possibly be related to demand factors, while long cycles (of several weeks) seem to mirror supply factors and might be related to Bitcoin mining in China. Finally, the analysis underlines the importance of continuous financial education and communication by the supervisory authorities about new, alternative financial assets.

Název v anglickém jazyce

Pandemic Versus Financial Shocks: Comparison of Two Episodes on the Bitcoin Market

Popis výsledku anglicky

With its rising popularity, the Bitcoin has also become increasingly independent from global financial markets. Recently, it has joined the class of alternative assets. We use the newly developed wavelet methodology to analyze daily data to compare the COVID-19 pandemic at the beginning of 2020 with the bear market episode at the end of 2018. In both cases, attention signals and a general panic are the main drivers of the Bitcoin fluctuations. We show that the Bitcoin&apos;s dynamic is more complex than the dynamics of standard financial assets. The Bitcoin is, on the one hand, subject to pandemic shocks but also represents an important source of attention signals. On the other hand, because the Bitcoin additionally reacts on an emotional basis, it might react faster than other assets and thus creates a market signal itself. Moreover, we identify short cycles (of several days), which may possibly be related to demand factors, while long cycles (of several weeks) seem to mirror supply factors and might be related to Bitcoin mining in China. Finally, the analysis underlines the importance of continuous financial education and communication by the supervisory authorities about new, alternative financial assets.

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

—

OECD FORD obor

50206 - Finance

Projekt

—

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2021

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Applied Economics Quarterly

ISSN

1611-6607

e-ISSN

1865-5122

Svazek periodika

67

Číslo periodika v rámci svazku

2

Stát vydavatele periodika

DE - Spolková republika Německo

Počet stran výsledku

29

Strana od-do

113-141

Kód UT WoS článku

—

EID výsledku v databázi Scopus

2-s2.0-85132358002