“This indicates a growing interconnectedness between the two asset classes that permits the transmission of shocks that can impact financial markets,” they add.
As Asian investors piled into cryptocurrencies, the correlation between the performance of the region’s equity markets and crypto assets has increased, according to the International Monetary Fund (IMF).
In an Aug 21 post, the IMF noted that the returns and volatility correlations between bitcoin and Asian equity markets were low before the pandemic but have increased significantly since 2020. Using its spillover methodology, the IMF found that the rise in crypto-equity correlations in Asia has been accompanied by a sharp rise in crypto-equity volatility spillovers in India, Vietnam and Thailand.
