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Sinda Hadhri
''How does Bitcoin react to economic discomfort? Evidence from the economic misery index''
( 2023, Vol. 43 No.3 )
Does Bitcoin love Misery? This paper answers this question by examining the relationship between Economic Discomfort as measured by the Barro (1999) misery index and Bitcoin fundamentals and finds that lagged Barro misery index significantly increases trading volume. The effect on Bitcoin volatility is positively significant with two month-delay but seems to revert as time elapses. Bitcoin returns are less predictable based on past misery. These findings are confirmed for the period of the Covid-19 pandemic.
Keywords: Barro misery; Bitcoin; Cryptocurrencies; VAR analysis
JEL: G1 - General Financial Markets
E1 - General Aggregative Models: General
Manuscript Received : Oct 02 2022 Manuscript Accepted : Sep 30 2023

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