Cryptocurrency value changes in response to national elections: do they behave like money or commodities?

Abstract

This study examines changes in the value of Bitcoin after the BREXIT and US Presidential elections in 2016 to determine whether it and other cryptocurrencies experienced value changes associated with the vote outcomes. For comparative purposes, Bitcoin is also compared to currencies such as the Great Britain Pound, Mexican Peso and Special Drawing Rights to determine whether Bitcoin values change like currencies. Some evidence showed changes in the value of Bitcoin were weakly similar to store-of-wealth commodities like gold and silver. Overall, the election-window volatility of cryptocurrencies was much higher than the preceding one-year average for the BREXIT vote but less volatile than the one-year average for the US election vote.