Hedging role of stablecoins

Kakinuma, Yosuke

doi:10.1002/isaf.1528

Cited by 3 publications

(1 citation statement)

References 29 publications

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“…Recent research has examined the safe haven properties of cryptocurrencies, particularly during the COVID-19 pandemic (Dasauki & Kwarbai, 2021;Kakinuma, 2023;Maitra et al, 2022). Several studies provide evidence that Bitcoin displays safe haven properties comparable to those of gold Shahzad et al, 2019Shahzad et al, , 2020Thampanya et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

Geopolitics, Uncertainty, and Cryptocurrency: A Love Triangle Gone Wrong

Dagher,

Rao,

Vishal

et al. 2024

AFL

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This study aims to investigate the spillover effects from geopolitical risks (proxied by the geopolitical risk index GPRD) and cryptocurrencies-related uncertainty (proxied by the Cryptocurrency Uncertainty Index UCRY) to cryptocurrencies. We utilize the Baruník and Křehlík (2018) framework to detect time-frequency connectedness. Our investigation for the period 2017 to 2022 discovers significant spillover effects from both indices (GPRD and UCRY) to cryptocurrencies. Utilizing the information transmission theory and network graphs, our findings reveal that some cryptocurrencies function as net receivers of spillovers from geopolitical risks and uncertainty in the short-term, while over longer time horizons they transform into net transmitters of spillovers to uncertainty. The study underscores the importance of comprehending how uncertainty due to various factors (geopolitical, policy changes, regulatory changes, etc.) could affect the cryptocurrencies’ markets.

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