According to representatives of the International Monetary Fund (IMF), there is now a significant association between the functioning of the Asian equity markets and digital currencies like Ethereum and Bitcoin. An article on cryptocurrency regulation and how it is now “more in pace with Asia’s stocks” was posted to the International Monetary Fund (IMF) blog on Monday. According to the article, before the pandemic, the returns and volatility correlations between Bitcoin and other crypto assets and Asian equity markets were minimal, but these have grown dramatically after 2020. On the other hand, crypto trading boomed as millions stayed at home and got government aid, whereas low-interest rates and cheap financing also played a role. Key Drivers Of The Increased Interconnectedness The increasing acceptance of cryptocurrency-related platforms and investment vehicles on the stock market and in the over-the-counter market, or more generally, the rising crypto adoption by retail and institutional investors in Asia, many of whom have roles in both the equity and crypto markets, could be the primary drivers of the increased interconnectivity of the crypto and equity markets in that region. Crypto And Its Relationship With Asian Equities Tara Iyer, an economist in the Monetary and Financial Markets Department’s global financial stability analysis division, Anne-Marie Gulde-Wolf, deputy director for Asia and the Pacific at IMF, and Nad...
