Relationship Between Bitcoin and Islamic Stock Indices During the COVID-19 Pandemic and the Russia-Ukraine Crisis

Abstract

We analyze the relationship between Bitcoin and major regional Islamic stock indices during two major events: COVID-19 and the Russia-Ukraine war. The multi-horizon analysis provide evidence of low correlation between Bitcoin’s inter-temporal returns and Islamic indices returns during periods before extreme events. However, there is limited potential for diversification in the long run as their correlations increase significantly. During shocks, Bitcoin cannot be a safe haven for Islamic markets.