| dc.description.abstract | The outbreak of the COVID-19 pandemic has spread rapidly around the world, and governments imposed restrictions has changed human life and influenced global economy. In March 2020, when WHO announced that COVID-19 has caused a global pandemic, Bitcoin plunged 37.17% in a single day. With the success of the COVID-19 vaccine development and the economic relief package provided by the government, Bitcoin price again reached an all-time high. Whether bitcoin is a diversification investment, a safe haven in a stock market crash, or a replacement for traditional safe-haven assets.
In this paper, we employ feasible generalized least squares (FGLS) method to analyze the impact of the pandemic on Bitcoin, gold and Standard & Poor′s 500 (S&P 500 Index). The period from short to long is divided into the COVID-19 period, the Bitcoin period and the full sample period. First, analyze the price of Bitcoin during the COVID-19 and the Bitcoin period, and compare with the price of gold and the S&P 500 index. Finally, according to the behavior of gold and the S&P 500 index during global financial crisis, analyze how Bitcoin price will change.
We find that the behavior of Bitcoin is similar to gold over a long-term period. When the financial crisis broke out, the price of gold fell by 16.19%. The price of gold rose by 3.81% when the epidemic occurred. Recalling that the 2008 global financial crisis while Bitcoin was proposed, a decentralized blockchain network would be sent directly without going through a financial institution, which can reduce the impact of systemic risks. We expected that when investors lose confidence in the traditional financial market or the fiat money, the price of Bitcoin will reach a new all-time high, which can be demand as a diversified investment tool. | en_US |