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The Impacts of the Conflicts Between Israel and Hamas, as well as Between Russia and Ukraine, on Financial Assets and Crypto-Currencies

Author

Listed:
  • Nidhal Mgadmi

    (University of Monastir)

  • Ameni Abidi

    (University of Sfax)

  • Néjib Hachicha

    (University of Sfax)

  • Wajdi Moussa

    (University of Tunis, Higher Institute of Management of Tunis-Tunisia)

Abstract

Our research stands out for its innovative nature, being the first to delve into the impact of the conflict between Israel and Hamas, as well as the war between Russia and Ukraine, on various markets such as crypto-currencies, stock indices, non-renewable energy prices, and Gold. We introduce the Israel-Hamas war Index and the Russia-Ukraine war Index to assess current Geopolitical Risks (GPR). To support our analysis, we conduct a literature review, examining previous studies addressing the influence of GPR. Our analysis focuses on four specific crypto-currencies: XRP, Bitcoin (BTC), Ethereum (ETH), and USDT. Additionally, we examine seven stock indices: the S&P500, Eurozone index (Euro-Stoxx 50), Moscow stock index (MOEX), Kiev stock index (PETS), UK stock index (FTSE 100), Tel Aviv stock index (TA 35), and Philistine stock index (Al-Quads). Prices of non-renewable energies, including Oil, natural Gas and Gold are also part of our analysis. We modeled each traditional financial asset and crypto-currency using the ARMA model at both level and first difference. We examined the existence or absence of heteroscedasticity and autocorrelation issues, as well as the presence of multiple changes using the Bai-Perron test (1998).We detected symmetric volatility using the FIGARCH model and selected only Ripple and Gold as hedging instruments and safe havens against current GPR. We employ the non-parametric wavelet coherence technique to investigate the Co-movement between these indices, energy prices, and the four crypto-currencies. We validated the close Co-movement between stock indices, non-renewable energy prices, and the two famous crypto-currencies (Bitcoin and Ethereum) during these periods of risk. However, there is a total absence of Co-movement between Ripple and Gold with other traditional assets and crypto-assets.

Suggested Citation

  • Nidhal Mgadmi & Ameni Abidi & Néjib Hachicha & Wajdi Moussa, 2025. "The Impacts of the Conflicts Between Israel and Hamas, as well as Between Russia and Ukraine, on Financial Assets and Crypto-Currencies," Computational Economics, Springer;Society for Computational Economics, vol. 66(2), pages 1671-1689, August.
    • Handle: RePEc:kap:compec:v:66:y:2025:i:2:d:10.1007_s10614-024-10776-1
    DOI: 10.1007/s10614-024-10776-1
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