Aws Y. Abed1 and Anas Al-Haj Hussein2
1Department of accounting, Faculty of Administrative Sciences and Economics,
2, 3Department of Business and Management, Faculty of Administrative Sciences and Economics,
Tishk International University, Erbil, Iraq.
Email: [email protected]
DOI: 10.23918/ICABEP2021p19
Abstract
Diversification is one of the golden concepts in portfolio management, where any rational investor is aware that it could reduce the risk and enhance the investment returns on the long run.
Lately, due to covid-19 pandemic that resulted into a decline in interest rates and high fluctuations in the financial markets, which means a high level of uncertainty. All this encouraged the investors to look for a safeguard for their wealth beyond the typical assets classes to create portfolios that consist financial securities, cash, real estates and also alternative investments.
Investing in cryptocurrencies, a modern alternative asset class that has been in the spotlight lately, is increasing due to an extraordinary high return. This research aims to study the behavior three cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB) and comparing their prices with the gold price throughout the whole period of the pandemic starting from the 13th of March, 2020 to the 28th of May, 2021, and on weekly basis.
Statistical analysis shows a high level of significant positive correlation among the prices of the three cryptocurrencies, which leads to the conclusion that investors have same behavior in investing in the cryptocurrencies as they expect more security for the value of their wealth. On the contrary, the analysis shows almost zero level of correlation for the price of Gold with any of the cryptocurrencies chosen in the study, which shows the different behavior investors have towards investing in gold, but the analysis showed a very low level of significance for the correlation and for that more analysis should be conducted with more variables like the oil prices and reliable financial indices.
Keywords: Gold, Cryptocurrencies, Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB)
ICABEP2021
International Conference on Accounting, Business, Economics and Politics
3rd joint conference organized by the collaboration of the Faculty of Administrative Sciences and Economics,
Tishk International University, College of Administration and Economics, Salahaddin University-Erbil, and
University of Szczecin, Poland.
