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“Shiny” crypto assets: A systemic look at gold-backed cryptocurrencies during the COVID-19 pandemic

Abstract : In this paper, we empirically analyse the performance of five gold-backed stablecoins during the COVID-19 pandemic and compare them to gold, Bitcoin and Tether. In the digital assets' ecosystem, gold-backed cryptocurrencies have the potential to address regulatory and policy concerns by decreasing volatility of cryptocurrency prices and facilitating broader cryptocurrency adoption. We find that during the COVID-19 pandemic, gold-backed cryptocurrencies were susceptible to volatility transmitted from gold markets. Our results indicate that for the selected gold-backed cryptocurrencies, their volatility, and as a consequence, risks associated with volatility, remained comparable to the Bitcoin. In addition, gold-backed cryptocurrencies did not show safe-haven potential comparable to their underlying precious metal, gold.
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https://hal-rennes-sb.archives-ouvertes.fr/hal-03512893
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Submitted on : Wednesday, January 5, 2022 - 3:47:49 PM
Last modification on : Saturday, August 6, 2022 - 3:22:36 AM

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Akanksha Jalan, Roman Matkovskyy, Larisa Yarovaya. “Shiny” crypto assets: A systemic look at gold-backed cryptocurrencies during the COVID-19 pandemic. International Review of Financial Analysis, 2021, 78, pp.101958. ⟨10.1016/j.irfa.2021.101958⟩. ⟨hal-03512893⟩

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