1,721,087 research outputs found
Bitcoin, the future or a gamble ?
No full textLe Bitcoin jouit d’une histoire très riche malgré son jeune âge. C’est la première cryptomonnaie au monde et la plus répandue. Le Bitcoin repose sur une technologie appelée blockchain capable d’enregistrer des transactions entre deux parties de manière très efficace et vérifiable sans avoir recours à un intermédiaire financier. Cette technologie a propriétés diverses, en particulier la transparence des transactions, l’anonymat, l’absence d’autorité centrale (décentralisation), la limitation de la quantité en circulation… Aussi, comme toute devise, la dynamique du prix du Bitcoin depend-elle de plusieurs facteurs. Nous allons, tout au long de cette dissertation, essayer de mieux comprendre ce phénomène, les principaux facteurs responsables de la variation de sa valeur, les enjeux qu’il soulève, ses propriétés ainsi que ses difficultés à surmonter pour qu’il devienne une véritable monnaie.In spite of its young age, Bitcoin has a rich history. It is the first and most widespread cryptocurrency in the world. Bitcoin is based on a technology called blockchain that can record transactions between two parties in a very efficient and verifiable way without resorting to a financial intermediary. This technology has various properties, in particular transaction transparency and anonymity, the absence of a central authority (decentralization), the limited and finite supply, among others. Also, like any currency, the Bitcoin’s price dynamics depend on several factors. Throughout this dissertation, we will try to better understand this phenomenon, the main factors responsible for the variation of its value, the issues it raises, its properties as well as its difficulties to overcome so that it becomes a real money
Are Trump and Bitcoin Good Partners?
No full textDuring times of extreme market turmoil, it is acknowledged that there is a tendency towards "flight to safety". A strong (weak) safe haven is defined as an asset that has a significant positive (negative) return in periods where another asset is in distress, while hedge has to be negatively correlated (uncorrelated) on average. The Bitcoin's surge alongside the aftermath of Trump's win in the 2016 U.S. presidential elections has strengthened its status as the modern safe haven. This paper uses a truly noise-assisted data analysis method, termed as Ensemble Empirical Mode Decomposition-based approach, to examine whether Bitcoin can act as a hedge and safe haven for U.S. stock price index. The results document that the Bitcoin's safe-haven property is time-varying and that it has primarily been a weak safe haven in the short term and the long-term. We also demonstrate that precious metals lost their safe haven properties over time as the correlation between gold/silver and U.S. stock price declines from short-to long-run horizons
A Synthesis of the Effects of Exchange Rate Volatility on International Trade: A Meta-Regression Analysis
No full textThis paper surveys literature that investigates the effects of exchange rate uncertainty on international trade. We perform meta-regression analysis on 41 studies with 807 estimates. We show that the empirical works exhibit substantial publication selection and show a significant genuine exchange rate volatility effect on trade flows after correction of publication bias. In addition, the literature reveals a pronounced heterogeneity with respect to model specifications, samples, time horizons, and countries characteristics. The results appear robust among the different estimators and to the inclusion of dummies for the type of research outlet and publication year. These findings are supported by separate assessment of primary studies with, respectively, total exports and sectoral exports as the dependent variable. In comparison with the sectoral exports literature, the total exports literature seems more homogenous and its identified exchange rate volatility effect on trade is less conditional. In general, our most important advice for policy makers is that economic research does not reveal a single representative effect size
Bitcoin Price: Is it really that New Round of Volatility can be on way?
Full text linkTo the mass public, Bitcoin is well known since its creation by its extreme volatility. However, Bitcoin’s declining fluctuations since the start 2015 has revived our attention to assess whether there is a coming Bitcoin market phase. Using an optimal GARCH model on daily data, we show that the volatility of Bitcoin price decreases notably when comparing the periods [December 2010-June 2015] and [January 2015-June 2015]. During the first interval, the Threshold- GARCH estimates reveal that there is a great duration of persistence and thus tends to follow a long memory process. For the second period, the chosen specification (Exponential-GARCH) displays less volatility persistence. Despite this remarkable volatility’s decrease, we cannot argue that Bitcoin market is mature, since the degree of asymmetry remains strong; Specifically, Bitcoin is likely to be driven by negative rather than positive shocks
How do futures contracts affect Bitcoin prices ?
No full textInternational audienceBitcoin futures were launched by the Chicago Board of Options Exchange and the Chicago Mercantile Exchange group on December 18th, 2017. This study stands as a first attempt to explore the reactions of Bitcoin spot market to the launch of futures contracts. Using an event-study methodology and an adjusted asset pricing model, we show that Futures trading drove up the price of Bitcoin immediately after the announcement day. This reaction started to decrease noticeably following the launch of the futures contracts. Such outcome seems in line with the trading behavior that typically accompanies the launch of futures markets for an asset
Should Bitcoin be used to help devastated economies? Evidence from Greece
No full textInternational audienceThe worldwide heightened economic uncertainty in countries like Venezuela, India, Britain, and Italy has strengthened more demand for Bitcoin. The deadlock between Greece and creditors doesn't seem to be going away and Greeks are very tired of the most punishing austerity measures connected to repayments of the loans. Greek people, who become increasingly mistrustful of their government, found solace in the Bitcoin as a refuge asset. The novelty of this paper lies in its methodological approach, which can pinpoint the dynamic effects of uncertainty surrounding the debt crisis on the interest in Bitcoin as an alternative to conventional and state-sanctioned banking system. Our findings confirm the great resilience of Bitcoin during periods of turmoil, highlighting its potential safe haven ability against uncertainty
Are UK industries resilient in dealing with uncertainty? The case of Brexit
No full textInternational audienceGiven the European Union (EU)'s central role in regulating various sectors, the decision to leave poses profound questions for UK industries in upheaval. This paper adopts an event-study methodology to examine, at sectoral level, the dynamics of stock prices surrounding the announcement of the UK's EU membership referendum on 24 June 2016. We find that the adjustment of stock prices is inconsistent with the Uncertain Information Hypothesis assuming that policy changes are typically associated to a decrease of stock prices, but once the uncertainty-induced event is reduced, stock prices would increase again. Analyzing seven sectors of British stock index, we show that the Brexit had a significant impact on the valuation of UK companies. While all industries face increasing uncertainty, the referendum outcome had varying sectoral effects. Specifically, the responses of banks and financial services, defense and airlines, real estate and technology to the Brexit event were even more severe than the reactions of oil and gas, pharmaceuticals and consumer goods. The lack of opportunity to benefit from the European passporting rules to establish businesses, to access to EU's Research and Development funds and to hire the skilled workers have been offered to explain the adverse effects of Brexit on UK industries
The Changing Geopolitics in the Arab World: Implications of the 2017 Gulf Crisis for Business
No full textInternational audienceThe international community was caught by surprise on 5 June 2017 when Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt severed diplomatic ties with Qatar, accusing it of destabilizing the region. More than one year after this diplomatic rift, several questions remain unaddressed. This study focuses on the regional business costs of the year-long blockade on Qatar. We split the sample to compare the stock market performances of Qatar and its Middle Eastern neighbors before and after the Saudi-led Qatar boycott. We focus our attention on the conditional volatility process of stock market returns and risks related to financial interconnectedness. We show that the Gulf crisis had the most adverse impact on Qatar together with Saudi Arabia and the UAE. Although not to the same degree as these three countries, Bahrain and Egypt were also harmfully affected. But shocks to the volatility process tend to have short-lasting effects. Moreover, the total volatility spillovers to and from others increase but moderately after the blockade. Overall, the quartet lobbying efforts did not achieve the intended result. Our findings underscore Qatar's economic vulnerability but also the successful resilience strategy of this tiny state. The coordinated diplomatic efforts of Qatar have been able to fight the economic and political embargo
Is there really causality between inflation and inflation uncertainty?
No full textInternational audienc
The Price of Political Uncertainty: Evidence from the 2016 U.S. Presidential Election and the U.S. Stock Markets
No full textThere is bountiful evidence that political uncertainty stemming from presidential elections or doubt about the direction of future policy make financial markets significantly volatile, especially in proximity to close elections or elections that may prompt radical policy changes. Although several studies have examined the association between presidential elections and stock returns, very little attention has been given to the impacts of elections and election induced uncertainty on stock markets. This paper explores, at sectoral level, the uncertain information hypothesis (UIH) as a means of explaining the reaction of markets to the arrival of unanticipated information. This hypothesis postulates that political uncertainty is greater prior to the elections (relative to pre-election period) but is resolved once the outcome of the elections is determined (relative to post-election period). To this end, we adopt an event-study methodology that examines abnormal return behavior around the election date. We show that collapsing stock returns around the election result is reversed by positive abnormal return on the next day, except some cases where we note negative responses following the vote count. Although Trump’s win plunges US into uncertain future, positive reactions of abnormal return are found. Therefore, our results do not support the UIH hypothesis. Besides, the effect of political uncertainty is sector-specific. While some sectors emerged winners (healthcare, oil and gas, real estate, defense, financials and consumer goods and services), others took the opposite route (technology and utilities). The winning industries are generally those that will benefit from the new administration’s focus on rebuilding infrastructure, renegotiating trade agreements, reforming tax policy and labour laws, increasing defense funding, easing restrictions on energy production, and rolling back Obamacare
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