Bitcoin as an investment and hedge alternative: A DCC MGARCH model analysis

Artikel

Volatility and investor sentiment have been factors for the slow adoption rate of Bitcoin (BTC) that was first recognized in 2008 as a potential store of value, investment vehicle and a hedge alternative to gold during a recession. The purpose of this applied mathematics study will use a multivariate DCC GARCH model. Bitcoin holds its ground in volatility. This study examines Bitcoin as an investment and hedge alternative to gold as well as the major stock index. To perform the research to explore the viability of Bitcoin as an investment and hedge alternative to gold, the authors conducted a DCC GARCH model analysis. The findings of this research paper confirm Bitcoin's cyclical performance between volatility and adoption. The findings give a strong ground for Bitcoin as the new digital currency, store of value, medium of exchange, and a unit of account and incentivize further research by theorists, scholars and examiners. The significance of this applied mathematics research and analysis will allow an unstoppable, incorruptible, and uncontrollable store of value, and investment vehicle, without governmental or institutional intervention. This study contributes by comparing and contrasting volatility stability based on the return levels of each Bitcoin on major indexes traded with BTC (based on fiat currencies) and gold.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Risks ; ISSN: 2227-9091 ; Volume: 9 ; Year: 2021 ; Issue: 9 ; Pages: 1-22 ; Basel: MDPI

Classification and Topics

• Classification: Wirtschaft
• Subject: bitcoin ; blockchain ; cryptocurrency ; DCC MGARCH ; risks

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Rudolf, Karl Oton ; Ajour El Zein, Samer ; Jackman Lansdowne, Nicola
• Event: Veröffentlichung
• (who): MDPI
• (where): Basel
• (when): 2021

Further information

• DOI: doi:10.3390/risks9090154
• Handle: http://hdl.handle.net/10419/258238
• Last update: 04.03.2025, 12:46 AM CET