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Flip the coin: Heads, tails or cryptocurrencies?

Author

Listed:
  • António Portugal Duarte

    (University of Coimbra, Centre for Business and Economics Research, CeBER and Faculty of Economics)

  • Fátima Sol

    (Univ of Coimbra, CeBER, Faculty of Economics)

  • Nuno Baetas da Silva

    (Ph.D. Student at Faculty of Economics, University of Coimbra)

  • Beatriz Rodrigues Vieira

    (Univ Coimbra, Faculty of Economics)

Abstract

This paper analysis and compares the volatility of seven cryptocurrencies – Bitcoin, Dogecoin, Ethereum, BitcoinCash, Ripple, Stellar and Litecoin – to the volatility of seven centralized currencies – Yuan, Yen, Canadian Dollar, Brazilian Real, Swiss Franc, Euro and British Pound. We estimate GARCH models to analyze their volatility. The results point to a considerably high volatility of cryptocurrencies when compared to that of centralized currencies. Therefore, we conclude that cryptocurrencies still fall far short of fulfilling all the requirements to be considered as a currency, specifically regarding the functions of store of value and unit of account.

Suggested Citation

  • António Portugal Duarte & Fátima Sol & Nuno Baetas da Silva & Beatriz Rodrigues Vieira, 2023. "Flip the coin: Heads, tails or cryptocurrencies?," CeBER Working Papers 2023-02, Centre for Business and Economics Research (CeBER), University of Coimbra.
    • Handle: RePEc:gmf:papers:2023-02
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    Cited by:

    1. António Portugal Duarte & Fátima Sol Murta & Nuno Baetas Silva, 2025. "Will the euro replace the U.S. dollar as the leading international currency? A volatility analysis," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 15(1), pages 1-27, March.

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    Keywords

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    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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