Social turbulence can affect people financial decisions, causing changes in spending and saving. During a global turbulence as significant as the COVID-19 pandemic, such changes are inevitable. Here we examine how the effects of COVID-19 on various jurisdictions influenced the global price of Bitcoin. We hypothesize that lock downs and expectations of economic recession erode people trust in fiat (government-issued) currencies, thus elevating cryptocurrencies. Hence, we expect to identify a causal relation between the turbulence caused by the pandemic, demand for Bitcoin, and ultimately its price. To test the hypothesis, we merged datasets of Bitcoin prices and COVID-19 cases and deaths. We also engineered extra features and applied statistical and machine learning (ML) models. We applied a Random Forest model (RF) to identify and rank the feature importance, and ran a Long Short-Term Memory (LSTM) model on Bitcoin prices data set twice: with and without accounting for COVID-19 related features. We find that adding COVID-19 data into the LSTM model improved prediction of Bitcoin prices.
翻译:社会动荡会影响人们的金融决策,导致支出和储蓄的变化。在像COVID-19大流行这样的全球性动荡期间,这种变化是不可避免的。在这里,我们研究COVID-19对不同管辖区的影响如何影响比特币的全球价格。我们假设经济衰退的封闭和预期会削弱人们对(政府发行的)货币的信任,从而提高低调。因此,我们期望找出该大流行造成的动荡、对比特币的需求以及最终价格之间的因果关系。为了检验这一假设,我们把Bitcoin价格和COVID-19案例和死亡案例的数据集合并在一起。我们还设计了额外的特征和应用统计和机器学习模型。我们采用了随机森林模型来确定和排列特质的重要性,并且对比特币价格数据设置了两次长期的短期记忆模型:与CVID-19相关特征有关,而不计入。我们发现在LSTM模型中添加了COVID-19数据,改进了比特币价格的预测。