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How does Bitcoin react to economic discomfort? Evidence from the economic misery index

Author

Listed:
  • Sinda Hadhri

    (ESDES Lyon the Business School of UCLy, France)

Abstract

Does Bitcoin love Misery? This paper answers this question by examining the relationship between Economic Discomfort as measured by the Barro (1999) misery index and Bitcoin fundamentals and finds that lagged Barro misery index significantly increases trading volume. The effect on Bitcoin volatility is positively significant with two month-delay but seems to revert as time elapses. Bitcoin returns are less predictable based on past misery. These findings are confirmed for the period of the Covid-19 pandemic.

Suggested Citation

  • Sinda Hadhri, 2023. "How does Bitcoin react to economic discomfort? Evidence from the economic misery index," Economics Bulletin, AccessEcon, vol. 43(3), pages 1235-1253.
    • Handle: RePEc:ebl:ecbull:eb-22-00730
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Barro misery; Bitcoin; Cryptocurrencies; VAR analysis;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models

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