Why is this research interesting to the general public?
Most economists and journalists expected bitcoin to fall apart after the collapse of the exchange Mt.Gox in early 2014. However, bitcoin and the blockchain technology has emerged stronger which poses some interesting questions about its implications on society.
It is also surging again both in price and in the media so research exploring the capabilities of bitcoin will further educate the public and remove some of the mystery surrounding the crypto currency.
Bitcoin, gold and the dollar – a GARCH volatility analysis
In a nutshell
This paper explores the financial capabilities of the virtual currency Bitcoin by comparing it to gold and the American dollar.
The paper compares the financial capabilities of bitcoin with that of gold and the dollar as they share similar traits. The results showed that bitcoin has a place on the financial markets and in portfolio management as it can be classified as something in between gold and the American dollar on a scale from pure medium of exchange advantages to pure store of value advantages.
Hedging capabilities of bitcoin. Is it the virtual gold?
In a nutshell
The paper shows that bitcoin can be used as a hedge against the FTSE 100 index as well as the American dollar in the short term which is similarly to the hedging capabilities of gold.
The research sat out to explore the hedging capabilities of bitcoin i.e. if bitcoin can be used to eliminate some market specific risks surrounding the FTSE 100 index and the American dollar. The analysis showed that bitcoin can be used to minimize risk in the short term and thereby may be useful for risk averse investors.