FACTORS INFLUENCING BITCOIN MARKET VOLATILITY DURING THE COVID-19 PANDEMIC CRISIS

The ecological structure of the cryptocurrency market and its external environmental impact cannot be ignored. Taking Bitcoin as an example, the study analyzes the Bitcoin market during the COVID-19 pandemic crisis from an environmental perspective based on the differences in the political and economic systems of China and the United States. First, the institutional environment selected in this study is used as an indicator of environmental measurement and divided into formal and informal sectors. In the analysis, the former selects the economic policy uncertainty index of China, while the latter selects bitcoin's social attention (including Google trends and the Baidu index) and investor sentiment as indicators. Second, financial market data such as foreign exchange and commodity futures are used as indicators for analyzing the environment of the bitcoin market. Using VAR modeling analysis, the results show that both the institutional and the market environment have an impact on bitcoin's market performance.