Hedging the downside risk of commodities through cryptocurrencies


Naeem M.A. Farid S. Balli F. Hussain Shahzad S.J.
2021Routledge

Applied Economics Letters
2021#28Issue 2153 - 160 pp.

Today, commodities are exposed to ever-increasing price volatilities due to extreme market uncertainties linked with financialization. The paper addresses a timely question of whether cryptocurrencies are hedge and safe-haven for commodities. We focus on this literature gap by using individual commodities from four groups, including metal, agriculture, precious metal, and energy. Further, we also consider four major cryptocurrencies, namely, Bitcoin, Ethereum, Litecoin, and Ripple for our analysis. Our findings show the functional role of cryptocurrencies as hedge and safe-haven for individual commodities. Moreover, the underlying properties are persistent during the crisis period.

commodities , Cryptocurrencies , hedge , safe-haven

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School of Economics and Finance, Massey University, Auckland, New Zealand
School of Business & Economics, University of Management & Technology, Lahore, Pakistan
Montpellier Business School, France
Higher School of Economics and Business, Al-Farabi Kazakh National University, Kazakhstan
South Ural State University, Chelyabinsk, Russian Federation

School of Economics and Finance
School of Business & Economics
Montpellier Business School
Higher School of Economics and Business
South Ural State University

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