Title: Bitcoin prices and rupee-dollar exchange rates during COVID-19

Authors: G. Naresh; S. Ananda

Addresses: Indian Institute of Management Ranchi, 5th Floor, Audrey House Campus, Meur's Road, Ranchi – 834008, Jharkhand, India ' Postgraduate Studies and Research Department, College of Banking and Financial Studies, P.O. Box 3122, PC: 112 Ruwi, Muscat, Sultanate of Oman

Abstract: Bitcoin is the primary cryptocurrency in the world that can be stored and traded through the internet. Digital contracts and cryptocurrencies created on blockchains have now been used in exchanging instruments on the networks and are available online readily. This paper's main objective is to investigate the causal relationship between bitcoin prices and rupee-US dollar exchange during COVID-19. The study used the Granger causality model to study the price behaviour of bitcoin and the rupee-dollar exchange rate. The study found an unidirectional Granger causality existed, where the rupee-US dollar exchange rate affected the bitcoin price in the Indian market during COVID-19. The bitcoins are widely considered as an investment asset in Indian markets, and the rupee-dollar exchange rate has a significant impact on the bitcoin prices.

Keywords: bitcoin; cryptocurrency; fiat currency; crypto assets; exchange rate; stock exchange; investment; portfolio; COVID-19; causality; bitcoin prices; rupee-dollar exchange rate; Granger causality.

DOI: 10.1504/IJEF.2021.115661

International Journal of Electronic Finance, 2021 Vol.10 No.3, pp.180 - 190

Received: 13 Sep 2020
Accepted: 01 Jan 2021
Published online: 15 Jun 2021 *

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