Research on the Impact Mechanism of Economic Policy Uncertainty on Bitcoin Prices
DOI:
https://doi.org/10.54097/fbem.v10i1.10236Keywords:
Economic policy uncertainty, Bitcoin price, Impact mechanism.Abstract
Has there been a linkage mechanism between the prices of Bitcoin and traditional wealth preservation investment tools, that is, Bitcoin may serve as an investment substitute when other investment tool markets are sluggish, or can also benefit from it when the overall investment market is hot. The price of Bitcoin exhibits extremely unstable characteristics, as it can double its value dozens of times in a very short period of time or return to its starting point in a single day. The rapid rise and short duration of Bitcoin's price show us its infinite potential. Through research, this paper finds that the price of Bitcoin fluctuates greatly, while the U.S. Dollar Index and the S&P 500 index are basically horizontal, and their volatility is relatively small. Therefore, Bitcoin may be used as a speculative product, and there is a lot of speculative behavior in the market. When the investment attributes of Bitcoin dominate, an increase in economic policy uncertainty will significantly suppress investor sentiment and cause Bitcoin prices to decline. In addition, its impact on the world financial system is also increasing.
Downloads
References
Mokni K.When, where, and how economic policy uncertainty predicts Bitcoin returns and volatility A quantiles-based analysis[J].The Quarterly Review of Economics and Finance, 2021, 37(1):22-34.
Khan K, Sun J, Koseoglu S D,et al.Revisiting Bitcoin Price Behavior Under Global Economic Uncertainty[J].SAGE Open, 2021, 11(3):37-41.
Ma J, Wang T, Zhao R.Quantifying Cross-Correlations between Economic Policy Uncertainty and Bitcoin Market: Evidence from Multifractal Analysis[J].Discrete Dynamics in Nature and Society, 2022, 20(9):18-27.
Sallal M, Owenson G, Salman D,et al.Security and performance evaluation of master node protocol based reputation blockchain in the bitcoin network[J].Blockchain Research (English), 2022, 18(001):003-009.
Huynh T L D, Wang M, VINH XUAN V O.ECONOMIC POLICY UNCERTAINTY AND THE BITCOIN MARKET: AN INVESTIGATION IN THE COVID-19 PANDEMIC WITH TRANSFER ENTROPY[J].The Singapore Economic Review, 2021, 38(12):46-52.
Fang L, Bouri E, Gupta R,et al.Does global economic uncertainty matter for the volatility and hedging effectiveness of Bitcoin[J].Elsevier, 2019, 22(11):31-49.
Cui X, Yao S, Fang Z,et al.Economic policy uncertainty exposure and earnings management: evidence from China[J].Accounting & Finance, 2020, 30(14):19-34.
Mokni K, Ajmi A N, Bouri E,et al.Economic policy uncertainty and the Bitcoin-US stock nexus[J].Journal of Multinational Financial Management, 2020:100656.DOI:10.1016/j.mulfin.2020, 30(15):19-35.
Wu C C, Ho S L, Wu C C.The Determinants of Bitcoin Returns and Volatility: Perspectives on Global and National Economic Policy Uncertainty[J].Finance Research Letters, 2021, 19(1):14-25.
Yao C Z, Li H Y.A study on the bursting point of Bitcoin based on the BSADF and LPPLS methods[J].The North American Journal of Economics and Finance, 2020, 45(11):10-20.
Wang P, Li X, Shen D,et al.How does economic policy uncertainty affect the bitcoin market[J].Research in International Business and Finance, 2020, 53(10):10-34.
