The Impact of the COVID-19 Pandemic and the Cryptocurrency Price on the Stock Exchange Index – Evidence from Shanghai Stock Exchange

Abstract

At the end of 2019, the COVID-19 pandemic that originated from Wuhan - China has become a serious global problem. China implemented a policy of isolation, social distancing, and mass vaccination among the population, and simultaneously its stock market recorded a remarkable growth in 2020 and 2021. Using the time-series data in the period from January 22, 2020, to March 24, 2021, the method of non-linear autoregressive distributed lags (NARDL) model is used to assess the impact of the pandemic on the Shanghai stock market. The research results show that there has been no impact of the pandemic on the Shanghai stock market both in the short and long terms. As for the impact of cryptocurrencies, there is an impact of cryptocurrencies on the stock market in the short term, specifically, a decrease in the price of the bitcoin-related cryptocurrency has significantly increased the Shanghai stock market. Further, there has been no impact between bitcoin-related cryptocurrencies and the stock market in the long term.