There rarely is a relationship, that does not operate in several regimes. For instance, most of us know that inflation and unemployment figures have inverse relationship. This relationship is usually explained or visualized using so cold Philips Curve ( https://www.investopedia.com/articles/markets/081515/how-inflation-and-unemployment-are-related.asp ). Yet historically there were periods, when both unemployment and inflation rates were both. These changes were observed at specific states of the market. In econometrics such situations are called sates of structural change. After a structural change a system or relationship may turn to other operating regime.

I do believe that in a growth states of stock market, BTC may have inverse relationship to stock returns. But that is BTC's correlation with stock returns in recession (market downturn) periods, we are about to learn in the near future. However, it needs to be emphasized that COVID-19 recession may also be a very specific structural changes for BTC and stock price relationship, as crypto market still is a relatively immature market.

https://cointelegraph.com/news/2-months-ago-andreas-antonopoulos-explained-why-bitcoin-would-crash/amp

https://beincrypto.com/gold-loses-5-entire-bitcoin-markets-in-a-single-day/amp/

Article Bat Coronaviruses in China

In this period of rising concerns about the economic fallout from the coronavirus pandemic and a global liquidity crunch, investors scramble for liquidity. The problem is that there's no single reason why investors choose to own Bitcoin. Some choose Bitcoin as a legitimate alternative to fiat currencies, but others own it for speculative reasons (i.e., they can buy Bitcoin low and sell it high). The global spread of coronavirus may be an occasion for Bitcoin enthousiasts and analysts to rethink Bitcoin's status as a safe haven. It looks to be be a "precarious" status...

https://threader.app/thread/1240330963508432896

https://threadreaderapp.com/thread/1238461002024472579.html

https://gulfnews.com/auto/news/volkswagen-the-worlds-largest-carmaker-shutting-down-1.1584540619415

https://www.cnbc.com/amp/2020/03/25/bernanke-says-this-is-much-closer-to-a-natural-disaster-than-the-great-depression.html

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3561560

Those who have been relying on quants (Including me), is there any model which can predict (or even get close to) unemployment insurance claims? High time to rethink...

https://www.theguardian.com/commentisfree/2020/apr/03/coronavirus-economic-crisis-financial-impact

In this slide there is the DEBT GDP ratio of some Europe countries & USA vs. death numbers COVID-19 associated >>> https://www.researchgate.net/figure/ResGa-FxFac-post_fig82_339781431

Other economic & financial themes in this open RG question about the dramatic situation in N.Italy >> https://www.researchgate.net/post/The_novel_Coronavirus_in_N_Italy_Lombardia_COVID19_2019nCoV_SARSCoV2_shows_a_fatality_rate_compatible_with_SARS-MERS_Why

Both supply and demand shocks working hand on hand

https://www.statista.com/chart/amp/21420/daily-price-per-barrel-of-wti-crude-oil/

https://scholar.harvard.edu/files/straub/files/slides_vmacs.pdf

https://scholar.harvard.edu/files/straub/files/mss_indebteddemand.pdf

Pendant cette période de confinement et de ralentissement des échanges internationaux, le bitcoin est moins interessant car c'est la monnaie privilégiée pour effectuer toute sorte de traffics illégaux. Le traffic ralentissant, la demande de bitcoins ralentis de facto et son cours baisse.

I do not understand the interest in this topic. In journals like "Finance Research Letters", every third article deals with cryptocurrencies. There are serious problems out there. The finance community should take care of these.

Even whales are afraid of Covid-19. But still they are doing a good job.

Josef Schosser , what do you suggest? Why do you think that any good journal should not focus such topics?

Josef is wrong. There is a lot of money in cryptocurrencies, then it is not a marginal problem. What I am saying is that the bitcoin price is completely manipulated. It is not a safe haven asset and what is happening is that whales do not whant that bitcoin price goes down. Who is investing in bitcoins now? Why bitcoin has now a significant correcltion with financial markets? These are the main questions.

Dear Jawad, Dear Helder. From a microeconomic or contract theory perspective, other financial instruments or "contracts" (such as common stock, debt, insurance, ...) can be economically justified, i.e., these contracts solve problems. What is the economic justification for Bitcoin? And is it worth that much of publication space (or even the energy consumption associated with the system)?

Josef Schosser We are not scrapping CAPM just because we failed to prove it empirically Article The Capital Asset Pricing Model (CAPM): The History of a Fai...

Crisis, bubbles and now lock downs, sometimes economic reasoning does not work and might work when people believe in it (https://onlinelibrary.wiley.com/toc/14676281/2013/49/S1) and thus we need innovative ideas, and Bitcoin is one. We did not know what it was and how it operates but thanks to publications that we now know much about its features, dynamics, pricing mechanisms and above all how we can use this idea in many different fields. One possible application of block chain and payment method in medicine is under study to be meet special situation like the one we are going through (times of social distancing, few say currency notes also spread COVID19).

In short, there could be debate on its usefulness (economic justification etc) and for that we need forms such as RG, blogs and publications.

Dear Jawad, Thank you for your contribution. I am not convinced by your argument. There are many ways to pay without cash (credit card, bank transfer, paypal, ...). All of them have lower transaction costs than Bitcoin. Why put so much effort into analyzing the pricing of a contract without function?

The CAPM is only a pricing model. It is not about contracts. But there is one thing in common. We need critical thinking and the power of logics, as in the article of Richard Roll (1977, A critique of the asset pricing theory's tests, Journal of Financial Economics), who identifies tons of misguided empirical studies.

Josef Schosser You ask "What is the economic justification for Bitcoin?" My answer would be that it creates a monetary system that is not centrally controlled.

Horst Treiblmaier Of course. But be more precise. Under what conditions (types of agents [investors, firms, government agencies, ..], possible actions, timeline of actions, preferences, information distribution, ...) are cryptocurrencies of use?

That is what I mean. There are no investigations of this kind. But there are many studies that investigate mere correlations.

Josef Schosser You make a good point here. The easy answer would be to say the lousier the monetary policy, the more cryptocurrencies are needed (apart from use cases that do not even involve "official" institutions such as the avoidance of scandalous fees for money transfer). Of course, we need to go beyond correlations and search for the underlying mechanisms.

https://www.forbes.com/sites/davidbirch/2020/06/26/bye-fintech-hello-techfin/amp/

Article Bitcoin: Economics, Technology, and Governance †

Article Bitcoin: Economics, Technology, and Governance †

Josef Schosser what you point out is a general problem with economics, and not something very specific to Bitcoin (and cryptos). See Article Sins of Omission and the Practice of Economics

Jawad Shahzad Yes, in a way. But very pronounced in contemporary finance. And with regard to other contracts, there have been excellent analyses in the past (cf. Bolton and Dewatripont, Contract theory). Concerning the paper of Akerlof: I am not for soft analyses, but for clear, theory-based investigations of relationships.