Cryptocurrency and Global uncertainties

Abstract

The purpose of this research was to examine the relationship between Cryptocurrency and global uncertainty. To achieve this, monthly data spanning from 2010 to 2022. The measurement of uncertainty was conducted using two indices, namely the World Uncertainty Index (WUI) and the Cryptocurrency Policy Uncertainty Index (CPUI). The independent variables utilised in this study encompassed various Cryptocurrency, namely Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Ripple (XRP), Litecoin (LTC), Monero (XMR), and Dash (DASH) coins. The study's methodology employed an explanatory research design and a quantitative research approach, enabling the use of parametric statistical analysis to examine the relationship between the variables under investigation. The overall conclusion drown from the study is that that investing in Cryptocurrency might be a viable way for investors to hedge against uncertainty on a global scale. Cryptocurrency is more resilient during periods of economic and political volatility and uncertainty in general, since it is not linked to any government or financial institution. Cryptocurrency are still a rather young and unstable asset class, nevertheless. Cryptocurrency challenge traditional financial regulations, as they operate in a decentralized and cross-border manner. Policymakers may need to establish clear and adaptable regulatory frameworks to address issues such as consumer protection, money laundering, tax evasion, and market manipulation Overall, even though Cryptocurrency may offer some benefits during an uncertain moment for the world, it is vital to approach them with prudence and a long term investment plan.