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

Mohamed Malek Belhoula ()
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Mohamed Malek Belhoula: Manouba University

Quality & Quantity: International Journal of Methodology, 2025, vol. 59, issue 6, No 32, 5649-5680

Abstract: 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.

Keywords: Cryptocurrency; Trading volume; Non-parametric causality; Bitcoin; Quantile connectedness approach (search for similar items in EconPapers)
JEL-codes: C14 C5 F3 G15 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11135-025-02219-2

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