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Bitcoin as a safe haven for portfolio diversification

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  • Sarita Meekoh
  • Parichat Sinlapates

Abstract

Global events including the COVID-19 epidemic, the conflict of Russia-Ukraine, and the Israel-Palestine conflict directly affect the economy, increasing volatility. Diversifying risk across asset classes using safe-haven assets offer protection to investors during a financial uncertainty period. During economic uncertainty, investing in Bitcoin helps disperse risks across asset classes. Hence, this research aims to examine the capacity of Bitcoin to function as a safe-haven asset. The period of study is segmented into four distinct periods: pre-events affecting the economy, the COVID-19 epidemic, the conflict of Russia-Ukraine, and the Israel-Palestine conflict. The exponential generalised autoregressive conditionally heteroskedastic (EGARCH) approach is employed to analyse the correlation and volatility concerning other asset values. The analysis revealed a positive relationship between Bitcoin and gold, during the COVID-19 epidemic. Bitcoin could function as a safe-haven asset throughout these specific periods. In the Russia-Ukraine conflict and the Israel-Palestine conflict, Bitcoin and gold did not exhibit a correlation.

Suggested Citation

  • Sarita Meekoh & Parichat Sinlapates, 2026. "Bitcoin as a safe haven for portfolio diversification," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 22(3/4), pages 225-233.
    • Handle: RePEc:ids:ijtrgm:v:22:y:2026:i:3/4:p:225-233
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