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Impact of COVID-19 effective reproductive rate on cryptocurrency

Author

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  • Marcel C. Minutolo

    (Robert Morris University)

  • Werner Kristjanpoller

    (Universidad Técnica Federico Santa María)

  • Prakash Dheeriya

    (California State University Dominguez Hills)

Abstract

The importance of cryptocurrency to the global economy is increasing steadily, which is evidenced by a total market capitalization of over $2.18T as of December 17, 2021, according to coinmarketcap.com (Coin, 2021). Cryptocurrencies are too confusing for laymen and require more investigation. In this study, we analyze the impact that the effective reproductive rate, an epidemiological indicator of the spread of COVID-19, has on both the price and trading volume of eight of the largest digital currencies—Bitcoin, Ethereum, Tether, Ripple, Litecoin, Bitcoin Cash, Cardano, and Binance. We hypothesize that as the rate of spread decreases, the trading price of the digital currency increases. Using Generalized Autoregressive Conditional Heteroskedasticity models, we find that the impact of the spread of COVID-19 on the price and trading volume of cryptocurrencies varies by currency and region. These findings offer novel insight into the cryptocurrency market and the impact that the viral spread of COVID-19 has on the value of the major cryptocurrencies.

Suggested Citation

  • Marcel C. Minutolo & Werner Kristjanpoller & Prakash Dheeriya, 2022. "Impact of COVID-19 effective reproductive rate on cryptocurrency," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-27, December.
    • Handle: RePEc:spr:fininn:v:8:y:2022:i:1:d:10.1186_s40854-022-00354-5
    DOI: 10.1186/s40854-022-00354-5
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    References listed on IDEAS

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    Cited by:

    1. Wei Xu & Daning Hu & Karl Reiner Lang & J. Leon Zhao, 2022. "Blockchain and digital finance," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-4, December.
    2. Ştefan Cristian Gherghina & Liliana Nicoleta Simionescu, 2023. "Exploring the asymmetric effect of COVID-19 pandemic news on the cryptocurrency market: evidence from nonlinear autoregressive distributed lag approach and frequency domain causality," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-58, December.
    3. Rui Ai & Yuhang Zheng & Serhat Yüksel & Hasan Dinçer, 2023. "Investigating the components of fintech ecosystem for distributed energy investments with an integrated quantum spherical decision support system," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-28, December.

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