IDEAS home Printed from https://ideas.repec.org/a/ids/ijmefi/v18y2025i5p316-340.html
   My bibliography  Save this article

The asymmetric relationship between monetary policy and the institutional investors march into cryptocurrencies

Author

Listed:
  • Youcef Maouchi

Abstract

Using monthly data from April 2017 to June 2023, this study explores the factors associated with the rising institutional investments in cryptocurrencies, focusing on US monetary policy. We employ nonlinear autoregressive distributed lag (NARDL) and multiple threshold nonlinear ARDL (MT-NARDL) models to investigate the relationship between institutional crypto assets under management (AuM), the US Shadow Federal Funds Rate, Bitcoin price, S%P 500 index, and VIX. The results reveal a long-run asymmetrical relationship: institutional Crypto AuM increase with decreasing rates but remain stable during periods of monetary tightening. Moreover, institutional exposure to cryptocurrencies shows long-term growth, though short-term market volatility reduces exposure. Interestingly, Bitcoin's price seems to play a minimal role in these decisions. Our findings highlight the need for robust risk management by portfolio managers and suggest that policymakers consider the institutional capital flows into cryptocurrencies, given the potential implications for financial stability.

Suggested Citation

  • Youcef Maouchi, 2025. "The asymmetric relationship between monetary policy and the institutional investors march into cryptocurrencies," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 18(5), pages 316-340.
    • Handle: RePEc:ids:ijmefi:v:18:y:2025:i:5:p:316-340
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=148854
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijmefi:v:18:y:2025:i:5:p:316-340. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=218 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.