Bitcoin and Global Political Uncertainty - Evidence from the U.S. Election Cycle

13 Pages Posted: 17 Jan 2020

See all articles by Tobias Burggraf

Tobias Burggraf

WHU - Otto Beisheim School of Management

Date Written: January 6, 2020

Abstract

In this study, we investigate the impact of political uncertainty on Bitcoin. Introducing the U.S. federal election cycle as a proxy for political uncertainty, we find that (i) an increase in political uncertainty leads to a decrease in Bitcoin return, (ii) political uncertainty has the strongest impact on Bitcoin six and three months prior the election and decreases as the election date approaches, and (iii) the effect is more pronounced in the left and right tail of the distribution. The results shed a new light on the property of Bitcoin being a safe haven asset and provide important information for investors and policymakers.

Keywords: Global political uncertainty, Bitcoin, Quantile regression

JEL Classification: G1, G14, G17

Suggested Citation

Burggraf, Tobias, Bitcoin and Global Political Uncertainty - Evidence from the U.S. Election Cycle (January 6, 2020). Available at SSRN: https://ssrn.com/abstract=3514522 or http://dx.doi.org/10.2139/ssrn.3514522

Tobias Burggraf (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

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