Abstract

This paper examines the impact of covid-19 ushered on the prices of gold, the virtual currency market specifically bitcoin, and the crude oil industry. Employing a non-linear causality approach, quantile-on-quantile, with daily data from January 2020 to June 2021 (1484 observations), we found evidence that the growth in the confirmed cases of Covid-19 affects the quantile of Bitcoin, Gold, and Oil. Also, we found an asymmetric (positive and negative) effect of confirmed cases on our variables throughout the quantiles. This study reveals that Bitcoin is the most variable influenced by confirmed cases’ growth, followed by oil, and the less one was the Gold. Although the high risks of Bitcoin volatility at the initial era of the Covid-19 pandemic, compared to the price of gold and oil, it showed more stability. However, it recovered faster than other financial assets and achieved new historical peaks. The paper stresses the necessity of precaution when investing in financial markets to avoid any potential risk that arise from global risk such as Covid-19. This paper is significant for investors across the financial markets, as it shows the risks of fluctuations in the financial markets and the asymmetric reaction of financial market to the outbreak.

Keywords: Covid-19, Bitcoin, Oil price, Gold price, Cryptocurrency