Cryptocurrencies and Swedish Stocks Performance During the Covid-19 Shock : Which market suffered more from the Covid-19 pandemic

Abstract: This paper explores whether cryptocurrencies outperformed the Swedish stock market during the Covid-19 pandemic. In the analysis, we used four cryptocurrencies in the form of Bitcoin, Ethereum, Cardano and Binance Coin, and the OMXS30 stock index. We evaluate the performance of the two different assets during the financial distress using daily data from November 2019 to December 2020. The empirical evidence shows that the stock index outperformed the cryptocurrencies during the shock period, looking at the information ratio, but was then outperformed by the cryptocurrencies in the period after the shock, indicating that the cryptocurrencies recovered faster from the crash. The paper also finds a significant relationship between the performance of cryptocurrencies and the google search trend before and after the shock, meaning that an increased investor interest in crypto is positively related to better performance of crypto.