Given the notion that cryptocurrencies may offer hedging benefits against stock market fall ( Baur et al., 2018 Al-Yahyaee et al., 2019), until recently, these digital currencies have attracted the attention of many investors. The high economic uncertainties associated with the spread of the pandemic and its resultant shock in financial markets induce investors to search for alternative assets that can offer safe hedging opportunities. Recent studies that have examined the impact of the COVID-19 pandemic on financial markets include financial market contagion ( Akhtaruzzaman et al., 2020, Ashraf, 2020, Salisu and Vo, 2020, Topcu and Gulal, 2019, Azimli, 2019, Goodell and Goutte, 2020, Baker et al., 2020), portfolio diversification opportunities ( Corbet et al., 2020, Conlon and McGee, 2020, Akhtaruzzaman et al., 2020, Yoshino et al., 2020), and co-movements among cryptocurrencies ( Yarovaya et al., 2020), among others. The contagion, which has percolated to the credit markets, has also adversely affected firm solvency, especially for firms with higher corporate debts. Similarly, S&P 500 and Nasdaq have also suffered from steep falls of 9.5 % and 9.4 %, respectively. Other European markets, such as France and Germany, have also dipped by 12 % ( BBC, 2020). For example, the UK’s benchmark index plunged by 10 %, equivalent to £160.4 billion, thus witnessing the worst fall since the 1987 market crash.
The excessive selling off has caused stock markets to plummet heavily. The impacts have further created panic among investors, leading them to start to “risk-off” their positions to minimize losses. For example, stock markets have fallen by 30 %, credit spreads of risky bonds have increased, and implied volatilities of stocks and oil have jumped to a new level ( OECD, 2020b). Thus, the anticipated loss in business has resulted in financial market turmoil and intensified economic uncertainty. To contain the spread of COVID-19 and losses of lives, most governments across the world have resorted to economy-wide lockdowns, resulting in the temporary shutdown of businesses and factories.
Since early March 2020, the global spread of COVID-19 has led to a sharp decline in economic growth, and as per recent estimates, the annual GDP growth of major world economies could be negative during 2020 ( OECD, 2020a). 2019, by genderĪwareness of selected cryptocurrencies in the U.S.The worldwide spread of COVID-19 has not only caused massive impairment to the socioeconomic status of the world population, but also wreaked havoc on the entire financial system across the globe. Some see these coins as the future of retail payments, whereas others view these coins as a "safe" addition to their crypto investments.įamiliarity with virtual currencies in the UK 2017Īwareness of selected cryptocurrencies in the U.S. This group of digital assets make up an increasing share within the overall crypto market. This is because these are stablecoins - cryptocurrencies pegged to the price development of external asset. Several coins in this ranking stand out as their price seemingly has not changed as much as others.
Stablecoins, the less volatile cryptocurrency It has no other applications built around it, and is considered too slow to perform financial transactions. Some describe Bitcoin as a digital version of gold, purely designed to hold or possibly purchasing power over time. When one categorizes the different types of cryptocurrencies, Bitcoin stands out as it is one of the few that are essentially meant to store digital value. Ethereum is one of several cryptocurrencies, for instance, that come from blockchains that focus on making financial applications possible.
However, Bitcoin is in a somewhat unique position. Bitcoin had the most expensive cryptocurrency for a while but Ethereum was significantly cheaper, with a price that was roughly 30 times less than that of the most well-known digital currency. Bitcoin ranked as one of the most expensive cryptocurrencies in existence by May 2023 - although values had declined significantly.
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