US Partisan Conflict and Cryptocurrency Market

27 Pages Posted: 12 May 2020

See all articles by Kuang-Chieh Yen

Kuang-Chieh Yen

Soochow University, Taiwan

Hui-Pei Cheng

Soochow University, Taiwan

Date Written: April 17, 2020

Abstract

This paper investigates whether partisan conflict can predict the cryptocurrency return and volatility. First, we find that the change rate of the partisan conflict can predict positively (negatively) the cryptocurrency return (volatility), Bitcoin in particular. Moreover, the findings still hold when controlling the effect of Chinese economic policy uncertainty (EPU), which is considered a significant predictor for the return and volatility of the Bitcoin. Overall, our results provide evidence to support that the Bitcoin could be a hedged asset against the risk from the U.S. partisan conflict.

Keywords: Bitcoin, Return, Volatility, Partisan Conflict, Economic Policy Uncertainty

JEL Classification: C22, G15, D81

Suggested Citation

Yen, Kuang-Chieh and Cheng, Hui-Pei, US Partisan Conflict and Cryptocurrency Market (April 17, 2020). Available at SSRN: https://ssrn.com/abstract=3578271 or http://dx.doi.org/10.2139/ssrn.3578271

Kuang-Chieh Yen (Contact Author)

Soochow University, Taiwan ( email )

56. kuei-yang St., Sec. 1
Taipei, Taiwan 10048
Taiwan

Hui-Pei Cheng

Soochow University, Taiwan ( email )

No.56, Section 1, Kueiyang Street
Taipei, Taipei 100
Taiwan

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