Articles

With the rise of virtual currencies, Bitcoin has gradually become one of the safe-haven tools in the financial market. During situations of worldwide outbreaks of an infectious disease, investors pay special attention to asset allocation. Therefore, this study discusses the outbreak of COVID-19 in China, which has affected financial markets and has led investors to avoid risks through investing in traditional financial products or Bitcoin. We found that during the time of the COVID-19 pneumonia, Bitcoin and gold futures were used for hedging transactions in the face of unstable Chinese market conditions and under the pursuit of investors' maximization of return on investment. Furthermore, there was also no difference between hedging through Bitcoin or gold futures; however, investors had a preference to invest in gold futures for hedging under the assumption that an investor was absolutely risk averse.