Volatility in focus: comparing cryptocurrencies, fiat currencies from high-inflation economies, and gold

Purpose The purpose of this study is to investigate the volatility dynamics of cryptocurrencies, fiat currencies from high-inflation economies and gold to assess their potential as stable stores of value in economically unstable contexts. This study compares the time-varying volatility of four major cryptocurrencies, four fiat currencies from high-inflation economies and gold over a six-year period (2017–2023). Design/methodology/approach Using an ARCH/GARCH framework, this study analyzes daily returns to capture volatility clustering, persistence and sensitivity to shocks. Data on cryptocurrencies, fiat currencies from high-inflation economies and gold were obtained from leading financial platforms, and model validity was ensured through stationarity checks (Augmented Dickey–Fuller and Kwiatkowski–Phillips–Schmidt–Shin), tests for conditional heteroskedasticity (ARCH–Lagrange Multiplier), autocorrelation checks (Ljung–Box) and structural break tests. Findings The results of this study show that cryptocurrencies are markedly more volatile than fiat currencies from high-inflation economies, confirming that even fragile fiat currencies tend to preserve more stability than decentralized digital assets. Gold remains less volatile than cryptocurrencies but is only marginally more stable than the Turkish lira, which casts doubt on its role as a consistent store of value in inflationary contexts. Taken together, the findings of this study underscore that neither cryptocurrencies nor gold provide reliable protection of purchasing power in high-inflation economies. Originality/value To the best of the authors’ knowledge, this study is the first to systematically compare the volatility profiles of cryptocurrencies, fiat currencies from high-inflation economies and gold within a unified framework. By moving beyond the speculative focus that dominates much of the cryptocurrency literature, this study provides novel evidence on the store of value potential of these assets in inflation-prone economies. The findings carry direct implications for policymakers and investors seeking protection against currency depreciation.