SAFE HAVEN ASSETS: ARE THEY STILL SAFE DURING COVID-19 PANDEMIC PERIOD?

Musaed S. AlAli

Abstract


During political, financial, and economic turmoil periods investors tend to flee toward what is called safe haven assets such as gold, Swiss franc and lately, Bitcoin. While previous literature supports such assumption, these studies were based on crises that faced certain geographic locations. The coronavirus pandemic on the other hand is a global crisis that affects the whole world. This study aims to examine the validity of the assumption that the Swiss franc, gold, and Bitcoin would still act as safe haven assets during Covid-19 pandemic period. Results obtained from this study shows that Swiss franc, gold had a positive returns during the study period which is in line with safe haven assets characteristics, but these returns were not caused by the stock markets negative returns. Bitcoin on the other hand showed negative returns during the study period and statistically significant positive relation with S&P 500 returns indicating that Bitcoin cannot be used as a safe haven asset.

 

JEL: G10; G11; G15

 

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Keywords


COVID-19, Coronavirus, safe haven assets, financial crisis, economic crisis, stock markets performance, pandemic period

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References


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DOI: http://dx.doi.org/10.46827/ejefr.v0i0.795

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