Ethereum as a Hedge: The intraday analysis

Abstract

In this study, we examine on intraday basis Ether - the token or cryptocurrency based on the Ethereum platform. Ether is the second largest crypto-currency, together with Bitcoin they dominate the cryptocurrency universe and account for almost 70% of combined market share. Similar to Bitcoin, Ethereum experienced rapid growth in price from a few cents per Ether after its introduction in 2015 reaching maximum of $1, 432.88 on January 13, 2018. In this paper, we study whether Ethereum crypto-currency is a hedge, diversifier or a safe haven asset. We find that Ethereum crypto-currency is a hedge against the US stock and gold markets. Also, Ethereum tends to behave as a safe haven for gold markets. When currency markets are concerned, we document that Ethereum is a diversifier for the US Dollar.