Crypto Markets and Safe Havens: A COVID-19 Perspective

During the COVID-19 pandemic, many people wondered if cryptocurrencies acted like gold during financial crises. This study looked at the top 10 traded cryptocurrencies and their connection to gold and crude oil markets before and during COVID-19. Researchers used various statistical methods to find out. Gold was a strong safe haven for Bitcoin, Litecoin, and Monero during the pandemic. Before COVID-19, it was only a strong safe haven for Litecoin and Monero.Brent crude oil was also a strong safe haven for Bitcoin during the pandemic. However, different types of crude oil had weaker safe haven properties for other cryptocurrencies. Before the pandemic, gold and crude oil influenced cryptocurrencies more, but during the pandemic, cryptocurrencies started to influence them. This means investors and policymakers might need to adjust their strategies during big financial events like the COVID-19 crisis.