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Bitcoin and traditional currencies during the Covid-19 pandemic period

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  • Chu, Meifen

Abstract

The objective of this study is to examine the movement of Bitcoin and the traditional currencies (USD, EURO, GBP and CNY) and the Bitcoin’s hedging of the traditional currencies. First, this paper observes the Bitcoin and four traditional currency exchange series: the USD, EURO, GBP and CNY. Second, it examines the fluctuation patterns of each series by using wavelet transform analysis, Third, a wavelet coherence analysis is applied to examine the interdependence between the Bitcoin and the four traditional currencies. The phase pattern analysis results indicate that the Bitcoin may not act as a hedging currency to replace the traditional currencies during the Covid-19 crisis. Another interesting result shows the rapid increasing number of the World Covid-19 Deaths (CovidDeaths) may not be the critical reason for the hyper price of the Bitcoin. The massive quantitative easing (QE) may be considered as the key reason for the soar-up of the Bitcoin price.

Suggested Citation

  • Chu, Meifen, 2021. "Bitcoin and traditional currencies during the Covid-19 pandemic period," MPRA Paper 110117, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:110117
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    References listed on IDEAS

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    More about this item

    Keywords

    Bitcoin; Traditional currencies; Covid-19; CovidDeaths; Hedging feature; Wavelet Analysis;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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