Investment Opportunities in The Time Of (COVID-19) Spread: The Case of Cryptocurrencies and Metals Markets

Abstract

The global financial and economic crises remain a controversial topic among the categories of investors, there are those who can see and seize investment opportunities, and there are some individuals who are proficient in investing in difficult economic conditions and can create opportunities even in the most difficult crises. With the emergence of the corona virus in China, it quickly became a global pandemic and caused tremendous damage to many global financial and economic markets.

This paper aims to shed light on investment opportunities in the global markets in light of the spread of the corona virus around the world, by studying the effect of the corona virus on the returns of the cryptocurrency currency and global metals markets traded in the US dollar, where the research period was determined based on the spread of the virus at a level The world, from the date of 25/3/2020 to 25/6/2020, and the best cryptocurrency currencies were chosen in terms of market value and trading during the research period and were Bitcoin, Ethereum and Tether, and the best metals in terms of popularity and trading were gold, silver and copper. Corona virus was measured by indicators of virus spread, which are the number of daily cases, cumulative cases and the number of daily deaths and cumulative deaths, at the level of 213 countries around the world, and the dependent variable represented in the cryptocurrency and metal markets was measured by the daily returns of the investment opportunities that were chosen in each market.

The research results showed that the cryptocurrency currency markets are affected by the spread of the corona virus and the independent variable was the most influential (Total Deaths) variable on all investment opportunities in the cryptocurrency market. The Total Deaths variable had more influence on the Gold market, and Total Cases variable had more influence on both Silver and Copper in the metals market.

The results also showed that there were no statistically significant differences between the average return on investment for the cryptocurrency currency markets and the metal markets, where the significance of the test reached (0.889), which is greater than the level of significance of 5%, due to the convergence of the average levels of the markets during the period of coronary virus spread throughout the world.

The best investment opportunities according to the return on investment index during the research period were, for cryptocurrency currency markets, the return on investment on Ethereum was (72.02%), then Bitcoin (38.98%), then Tether (0.23%), and in relation to the metal markets, the return was on the investment for Silver was (42.16%), then Copper (20.75%), then Gold (8.54%).