COVID-19 full vaccination and blockchain size: empirical evidence from the cryptocurrency market

Abstract

PurposeThis paper aims to analyse COVID-19 indices and blockchain features on Bitcoin and Ethereum returns, respectively. The authors focus on the most used and owned cryptocurrencies that cover Europe, the US and Asian countries.Design/methodology/approachAn autoregressive distributed lag panel (pooled mean group and mean group) is utilized, and a robustness check is incorporated by using a Random Effect Model and Generalized Method of Moments (GMM).FindingsFour new findings were discovered, including (1) the vaccine confidence index (VCI) pushes economic recovery and increased demand for the Bitcoin market, but the opposite result was interestingly observed from Ethereum; (2) the blockchain features were revealed to be essential to Bitcoin, while they were irrelevant to Ethereum for short-run country-specific results; (3) the hash rate and network difficulty moved inversely during the pandemic; and (4) the government played a significant role in taking action during uncertain times and regarding cryptocurrency policies.Research limitations/implicationsVCI is constructed by the most used vaccine type in our sample countries (i.e. Pfizer), as the data for a specific classification by each type is still unavailable.Practical implicationsProviding an evenly distributed vaccination program primary vaccination series against COVID-19 to the citizens is an essential duty of the government. Bitcoin policymakers and investors should watch the COVID-19 vaccine distributions closely as it will affect its return. Ethereum is emphasized to keep developing its smart contract which appeared to outplay other blockchain features. Cryptocurrency investors should be wise in their investment decisions by analysing the news thoroughly.Social implicationsThis research emphasizes that the success in the roll-out of COVID-19 vaccination requires citizens' willingness to participate and their trust in the vaccine's efficacy. Such self-awareness and self-discipline in society can ultimately empower individuals and stabilise the economy. Nevertheless, the implementation of health protocols is still highly required to prevent the spread of new variants of COVID-19.Originality/valueThis is the first study that attempts to construct a VCI which denotes the confidence derived from the administration of full-dose COVID-19 vaccines (an initial vaccine and a second vaccine). The authors further find the impact on cryptocurrency returns. Next, blockchain size is utilized as a new determinant of cryptocurrencies.