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Crypto VS Wall Street: Decoding the effect of Bitcoin halving

Author

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  • Daglis, Theodoros
  • Konstantakis, Konstantinos N.
  • Lazarou, Georgios
  • Michaelides, Panayotis G.
  • Stamos, Dimitrios L.

Abstract

This study explores how Bitcoin halving reshaped the dynamic interplay between cryptocurrencies and traditional financial assets. Using daily data from November 9, 2017, to March 14, 2022, and applying spectral causality tests with a frequency-domain approach, we examine the evolving relationships between Bitcoin, Ethereum, and key conventional investments, such as gold, the S&P 500, and U.S. Treasury bonds, before and after halving episodes. We uncover strong causality between cryptocurrencies and traditional assets in the pre-halving phase, which weaken significantly post-halving, highlighting a decoupling effect. Our findings shed light on market transformation mechanisms, with critical insights for investors, portfolio managers, and regulators navigating the crypto-financial nexus.

Suggested Citation

  • Daglis, Theodoros & Konstantakis, Konstantinos N. & Lazarou, Georgios & Michaelides, Panayotis G. & Stamos, Dimitrios L., 2025. "Crypto VS Wall Street: Decoding the effect of Bitcoin halving," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325018239
    DOI: 10.1016/j.frl.2025.108569
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    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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