Original scientific paper
https://doi.org/10.1080/1331677X.2021.2013269
The inevitable role of bilateral relation: a fresh insight into the bitcoin market
Meng Qin
Tong Wu
Ran Tao
Chi-Wei Su
Stefea Petru
Abstract
This paper clarifies the association between the Sino-U.S. bilateral
relation (BR) and Bitcoin price (BCP) by applying the bootstrap
full- and sub-sample Granger causality tests. It reveals that BR has
positive and negative effects on BCP. The negative impact points
out that Bitcoin is viewed as a tool to avoid uncertainties caused
by the deterioration of BR, also proving that the strained relation
between China and the U.S. can stimulate the Bitcoin market.
However, this opinion is not held under a positive impact, the
main explanation is that the burst of bubble weakens its ability
to hedge risks. The above conclusion is not consistent with the
theoretical model, underlining that the Bitcoin market is boosted
by the deterioration of BR. Conversely, there is a negative influence from BCP to BR, meaning that the relationship between
China and the U.S. can be reflected by the Bitcoin market. Under
the complex and volatile international situation, investors can
benefit from this investigation to compensate for the losses and
keep their wealth. Also, it helps the related authorities to create a
stable investment environment and promote friendly bilateral relations.
Keywords
BitCoin price; causality; dynamic nexus; bilateral relation
Hrčak ID:
302700
URI
Publication date:
31.3.2023.
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