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Bitcoin’s cross-asset influence: forks, altcoins, and stablecoins in a quantile framework

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  • Mohamed Malek Belhoula

    (Manouba University)

Abstract

This study investigates Bitcoin’s pivotal role in the cryptocurrency market by examining how its trading volume shapes the returns and volatility of Bitcoin forks, Ethereum, stablecoins, and altcoins. We apply a non-parametric causality-in-quantiles approach and quantile connectedness analysis to daily data from January 1, 2018, to March 8, 2025, revealing Bitcoin’s pronounced influence across diverse market states. The methodology’s strength lies in its ability to detect nonlinear, condition-specific spillovers, showing that Bitcoin trading volume significantly drives returns and volatility in extreme (bullish and bearish) conditions, particularly for Bitcoin forks due to their technological ties, while uncovering relative independence of Ethereum, stablecoins, and altcoins during stable periods. These findings highlight a dynamic interplay: Bitcoin amplifies market surges and downturns, yet other assets decouple under calmer conditions, driven by idiosyncratic factors. This nuanced interplay provides valuable insights, enabling investors to leverage Bitcoin trading volume as a predictive tool for cross-asset movements to optimize allocation and hedging, while offering institutions a clearer framework for managing tail risks and refining regulatory strategies in an interconnected crypto market.

Suggested Citation

  • Mohamed Malek Belhoula, 2025. "Bitcoin’s cross-asset influence: forks, altcoins, and stablecoins in a quantile framework," Quality & Quantity: International Journal of Methodology, Springer, vol. 59(6), pages 5649-5680, December.
    • Handle: RePEc:spr:qualqt:v:59:y:2025:i:6:d:10.1007_s11135-025-02219-2
    DOI: 10.1007/s11135-025-02219-2
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    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • F3 - International Economics - - International Finance
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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