Bitcoin versus Commodity assets: Impact on the US equity market before and after COVID-19 crisis: Evidence from PLS regression

Abstract This study investigates the interactions among US stock market, crude oil, natural gas and bitcoin assets using daily data covering the period from January 20, 2015 to December 10, 2021, through PLS regression method. Due to COVID-19 pandemic, the study period is characterized by lockdowns and mobility. This situation may affect the global economy and the financial market in the USA. Thus, a conscientious analysis of the incidence of a sanitary crisis such as COVID-19 on equity market seems to be primordial. Results are very interesting and approve the presence of a significant impact of COVID-19 pandemic on the U.S. financial market. More importantly, the follow up of the interconnections between the three assets under consideration and the US stock market proved that the strengthen of these interdependences have been changed due to the sanitary crisis. Moreover, like after the financial crisis of 2008, during the sanitary crisis the crude oil asset seems to be the most decisive to boost the US stock market. Taken together, our empirical findings are effective for the relevant authorities and policymakers in the United States to establish an appropriate financial and fiscal policy such as promoting investment in crude oil in order to boost the US equity market. JEL codes: F65 – Q41 – G12