Bitcoin:Friend or Foe for Investors? A Look at What Happens in China!

Every day, from 2013 to 2017, Bitcoin and six other major financial assets like stocks, commodities, gold, foreign exchange, money market, and bonds were watched closely in China as a study tried to figure out the gold rush. The goal was to see if Bitcoin could be a shield or a buffer for investors. A fancy model called VAR-GARCH-BEKK was used to test this out. What did they find? It turns out only one thing, the Shanghai Interbank Offered Rate, affected how much Bitcoin was worth on average. It's like when the price of apples goes up, the price of oranges might go up, too. Gold, money market, and bonds each had a say on how volatile Bitcoin could be, but Bitcoin only had a say on the gold market. The results made it possible for investors to learn how to protect their Bitcoin investments better when dealing with stocks, bonds, and the Shanghai Interbank Offered Rate. So, what does this mean? What can we learn? It is best to gain as much information in advance as you can about how things like the stock market move in order to predict how Bitcoin will react. An unexpected situation may occur and one should be ready for it. The results are important for investors and risk managers who use Bitcoin and those who are thinking about noting what happens in China next. Bitcoin might not be the savior people thought it would be. It can still be a big help when investing or protecting your portfolio\, But hey, don't forget you need to think critically to ensure you better protect yourself from the unexpected. Things can go wrong so you need to figure out the risks yourself.