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

Author

Listed:
  • Tobias Burggraf

    (WHU - Otto Beisheim School of Management)

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.

Suggested Citation

  • Tobias Burggraf, 2020. "Bitcoin and Global Political Uncertainty – Evidence from the U.S. Election Cycle," Economics Bulletin, AccessEcon, vol. 40(1), pages 727-742.
    • Handle: RePEc:ebl:ecbull:eb-20-00047
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Global political uncertainty; Bitcoin; Quantile regression;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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