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Safe havens for Bitcoin

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  • Nedved, Martin
  • Kristoufek, Ladislav

Abstract

We examine whether gold, crude oil, and stock markets could serve as safe havens for Bitcoin. As an investor into cryptoassets faces high risk when holding for longer periods and might be interested in diversifying and hedging outside of cryptoassets, these traditional assets might be of interest. We find that Bitcoin moves together with the stock markets but oil and gold can serve as safe havens. Specifically gold is identified as a strong safe haven for Bitcoin. In addition, we describe the evolution of the stocks–Bitcoin nexus which unveils in the safe haven discussion. Our results aim to lay foundations for further discussions into the topic of safe havens for cryptoassets as these are becoming increasingly standard part of investors’ portfolios, being it institutional or retail, and thus protection against their extreme movements and diversifications of their risk will play an important role in the investors’ decision making.

Suggested Citation

  • Nedved, Martin & Kristoufek, Ladislav, 2023. "Safe havens for Bitcoin," Finance Research Letters, Elsevier, vol. 51(C).
    • Handle: RePEc:eee:finlet:v:51:y:2023:i:c:s1544612322006134
    DOI: 10.1016/j.frl.2022.103436
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    Cited by:

    1. Ali, Fahad & Sensoy, Ahmet & Goodell, John W., 2023. "Identifying diversifiers, hedges, and safe havens among Asia Pacific equity markets during COVID-19: New results for ongoing portfolio allocation," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 744-792.

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    More about this item

    Keywords

    Cryptoassets; Bitcoin; Safe haven; Gold;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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