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Putri, D.E., Ilham, R.N., Sinurat, M., Lilinesia, L. and Saragih, M.M.S. (2021) Analysis of Potential and Risks Investing in Financial Instruments and Digital Cryptocurrency Assets during the Covid-19 Pandemic. Jurnal SEKURITAS (Saham, Ekonomi, Keuangan dan Investasi), 5, 1-12. https://doi.org/10.32493/skt.v5i1.10968

has been cited by the following article:

• TITLE: Stock Market Response to Investment in Cryptocurrencies in United State: A Dynamic ARDL Simulation Approach

  AUTHORS: Aderonke Tosin-Amos

  KEYWORDS: Cryptocurrencies, Stock Market, Dynamic ARDL Simulation

  JOURNAL NAME: Open Access Library Journal, Vol.10 No.6, June 25, 2023

  ABSTRACT: Virtual assets and currency sector are becoming increasingly intertwined. According to new IMF research, the correlation of crypto assets with traditional holdings like equities has increased dramatically as usage has grown, limiting their risk perception investment opportunities, and raising the danger of spillover across financial markets. Theoretical and empirical findings concerning cryptocurrencies and stock market behaviour have been misleading thereby putting policy makers at a crossroads. This paper therefore examines the response of stock market to investment in cryptocurrencies in the US stock market. Monthly data covering the period between February 2016 to February 2022 was used. The answer was achieved using novel dynamic autoregressive-distributed lag (ARDL) simulation techniques along with the Breitung and Candelon causality test. Findings revealed that cryptocurrencies impacted positively on the US stock market. Secondly, investment in Bitcoin and Ethereum is a good predictor of stock market while no evidence of causality between investment in ripple and stock market indices in the US stock market. Thirdly, a long-run relationship exists between investment in cryptocurrencies and behaviour of stock market indices in the United State, and that investment in cryptocurrencies has a significant long-run increasing effect on stock prices in United State.