Crypto-assets better safe-havens than Gold during Covid-19: The case of European indices

TL;DR

This study compares the safe-haven effectiveness of Crypto-assets and Gold during the Covid-19 crisis, finding some Crypto-assets outperform Gold as safe-havens for European assets.

Contribution

It provides empirical evidence that certain Crypto-assets can serve as better safe-havens than Gold during market crises, challenging traditional views.

Findings

Gold was less efficient than some Crypto-assets as a safe-haven during Covid-19.

Bitcoin, Ethereum, Litecoin, and Ripple acted as diversifiers for European indices.

Tether, Cardano, and Dogecoin showed hedging properties similar to Gold.

Abstract

As the first crisis faced by Crypto-assets, Covid-19 updated the debate about their safehaven properties. Our paper tries to analyze the safe-haven properties of Crypto-assets and Gold for European assets. We find that Gold has not been more efficient than Cryptoassets (Tether, Cardano and Dogecoin) as safe-haven during the market crash due to Covid-19 in March 2020. We also found that during the study period Bitcoin, Ethereum, Litecoin and Ripple were just diversifiers for the European indices. Finally, Tether, Cardano and Dogecoin showed hedging properties like Gold before and after the market crash.