Bitcoin, gold and S&P500 reactions during the COVID-19 pandemic

This thesis examines a comprehensive survey of the responses of three key assets (Gold, S&P500 and Bitcoin) to the extraordinary monetary easing policies enacted in response to the unprecedented COVID-19 pandemic. The outbreak of the epidemic in early 2020 caused deep disruptions to global financial markets and the broader economic landscape, prompting governments and central banks to take comprehensive monetary measures to mitigate the repercussions of the crisis. This study aims to unravel the complex interplay between pandemic-induced uncertainties and key monetary interventions and shape the responses of these key assets. The research is based on GARCH (Generalized Autoregressive Conditional Variable Variance), MS-GARCH (Multivariate Generalized Autoregressive Conditional Variable Variance), CNN (Convolutional Neural Network) and RNN (Recurrent Neural Network). Through a systematic exploration of these models, the study aims to uncover not only commonalities but also divergent trajectories in Gold, S&P500 and Bitcoin's responses to massive monetary interventions at this critical juncture. The findings of this research stand ready to provide invaluable information to a diverse spectrum of stakeholders, including investors, financial institutions and policy makers. Examining how these key assets are navigating the unprecedented landscape of expansionary monetary policies during the pandemic could empower investors with greater acumen to navigate volatile markets and optimize their portfolios. For financial institutions, a detailed understanding of the assets' responses can serve as a compass for fine-tuning their risk management strategies, thereby increasing the resilience of their portfolios. Equally important, policy makers can gather vital insights into the effectiveness of broad monetary interventions during crisis scenarios, thereby encouraging a more informed approach to crisis mitigation. In a nutshell, this thesis takes a nuanced and multifaceted view of current knowledge, shedding light on how Gold, S&P500 and Bitcoin are interfacing with the unprecedented combination of a global pandemic and far-reaching monetary policies. By focusing on the responses of these assets, the research strengthens the intellectual toolkit for navigating the complex terrain of future crises and designing investment strategies adapted to the interaction of pandemic uncertainties and broad monetary interventions.