Does U.S. monetary policy sway global crypto investment demand?

Martin Hodula

Finance Research Letters, 2025, vol. 80, issue C

Abstract: This paper examines how U.S. monetary policy shocks influence cryptocurrency demand, using novel data on cryptocurrency app usage and downloads from G20 nations between 2015 and 2022. We find that monetary tightening reduces demand, with standard policy shocks causing persistent declines in downloads and usage. While Bitcoin bull markets help mitigate this effect, they do not fully offset it. In contrast, large-scale asset purchase shocks increase app usage, reflecting heightened engagement from existing users, while forward guidance shocks drive speculative interest, particularly in crypto app downloads. These findings underscore the complex interaction between monetary policy and retail cryptocurrency participation.

Keywords: Bitcoin; Cryptocurrencies; Energy prices; Households; Investor behavior (search for similar items in EconPapers)
JEL-codes: D14 G11 G23 G51 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:80:y:2025:i:c:s1544612325006683

DOI: 10.1016/j.frl.2025.107408

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