COVID-19 Factors and Interest Rates Impacting on Bitcoin Price: A Case Study in ASEAN-5 Countries

This research aims to determine the COVID-19 factors and central banks' interest rates impacting on the Bitcoin price. A dearth study of measuring central banks' interest rate as Bitcoin determinants is the main research problem we aim to solve and hence produce the originality/value of this research. The COVID-19 factors utilized are COVID-19 cumulative cases and deaths. We further used the interest rate as a moderator variable. Feasible Generalized Least Square (FGLS) and moderated regression are applied as the first and second stage methodologies, respectively. We collected daily data from 2 March 2020 - 12 March 2021 and hence the total observations are 1,350. Focusing on the ASEAN-5 countries, this research found that Bitcoin can be an alternative investment. However, its character as a speculative asset may decrease investors' interest in Bitcoin when the condition is highly uncertain. Interest rate affects inversely on Bitcoin but insignificant. Surprisingly, the interest rate revealed a stronger inverse impact as a moderator variable to the Bitcoin price. Therefore, investors and central banks are highly suggested to watch the current condition for a better investment decision making and monetary policy adjustment to control and stabilize the economy.