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Is Bitcoin a Safe-Haven Asset During U.S. Presidential Transitions? A Time-Varying Analysis of Asset Correlations

Author

Listed:
  • Pathairat Pastpipatkul

    (Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand)

  • Htwe Ko

    (Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand)

Abstract

Amid the growing debate over how cryptocurrencies are reshaping global finance, this study explores the nexus between Bitcoin, Brent Crude Oil, Gold and the U.S. Dollar Index. We used a time-varying vector autoregressive (tvVAR) model to examine the connection among these four assets during the Trump (2017–2020) and Biden (2021–2024) governments. The 48-week return forecast of the Bitcoin–Gold correlation was also conducted by using the Bayesian Structural Time Series (BSTS) model. Results indicate that Bitcoin was the most volatile asset, while the U.S. Dollar remained the least volatile under both regimes. Under Trump, U.S. Dollar significantly influenced Oil and Bitcoin while Bitcoin and Gold were negatively linked to Oil and positively associated with U.S. Dollar. An inverse relationship between Bitcoin and Gold also emerged. Under Biden, Bitcoin, Gold, and U.S. Dollar all significantly affected Oil with Bitcoin showing a positive impact. Bitcoin and Gold remained negatively correlated though not significantly, and the Dollar maintained positive ties with both. Forecasts show a positive link between Bitcoin and Gold in the coming year. However, Bitcoin does not exhibit consistent characteristics of a safe-haven asset during the U.S. presidential transitions examined, largely due to its high volatility and unstable correlations with a traditional safe-haven asset, Gold. This study contributes to the understanding of shifting relationships between digital and traditional assets across political regimes.

Suggested Citation

  • Pathairat Pastpipatkul & Htwe Ko, 2025. "Is Bitcoin a Safe-Haven Asset During U.S. Presidential Transitions? A Time-Varying Analysis of Asset Correlations," IJFS, MDPI, vol. 13(3), pages 1-26, July.
    • Handle: RePEc:gam:jijfss:v:13:y:2025:i:3:p:134-:d:1707238
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    References listed on IDEAS

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    1. Shaen Corbet & Charles Larkin & Brian M. Lucey & Andrew Meegan & Larisa Yarovaya, 2020. "The impact of macroeconomic news on Bitcoin returns," The European Journal of Finance, Taylor & Francis Journals, vol. 26(14), pages 1396-1416, September.
    2. Jose Arreola Hernandez & Mohammad Zahid Hasan & Ron P. McIver, 2023. "Bitcoin, gold, and the VIX: short- and long-term effects of economic policy uncertainty," Applied Economics Letters, Taylor & Francis Journals, vol. 30(6), pages 761-765, March.
    3. Klein, Tony & Pham Thu, Hien & Walther, Thomas, 2018. "Bitcoin is not the New Gold – A comparison of volatility, correlation, and portfolio performance," International Review of Financial Analysis, Elsevier, vol. 59(C), pages 105-116.
    4. Choudhary, Sangita & Jain, Anshul & Biswal, Pratap Chandra, 2024. "Dynamic linkages among bitcoin, equity, gold and oil: An implied volatility perspective," Finance Research Letters, Elsevier, vol. 62(PB).
    5. Su, Chi-Wei & Qin, Meng & Tao, Ran & Shao, Xue-Feng & Albu, Lucian Liviu & Umar, Muhammad, 2020. "Can Bitcoin hedge the risks of geopolitical events?," Technological Forecasting and Social Change, Elsevier, vol. 159(C).
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    Cited by:

    1. Pathairat Pastpipatkul & Htwe Ko, 2025. "Institutional Quality, Macroeconomic Policy, and Sustainable Growth in Thailand," Sustainability, MDPI, vol. 17(16), pages 1-29, August.

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