The Impact of Cryptocurrency Adoption on Stock Market Capitalization: A Cross-Country Analysis

Emir Menda

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates the relationship between cryptocurrency adoption and stock market capitalization across countries, while controlling for GDP per capita. Using cross-sectional data from 154 countries, we employ ordinary least squares regression to analyze this relationship. The findings reveal a statistically significant positive association between cryptocurrency adoption and stock market capitalization. Specifically, that a one-unit increase in the cryptocurrency adoption score is associated with a 182.614 percentage point increase in stock market capitalization as a percentage of GDP. In addition, GDP per capita shows a significant positive relationship with stock market capitalization, confirming the connection between economic development and financial market depth. These results suggest that cryptocurrency adoption complements traditional financial markets rather than substituting, offering important insights for policymakers, investors, and researchers in understanding the evolving financial landscape. This study contributes to the growing literature on cryptocurrency markets by providing a broader, cross-country perspective on how digital currency growth affects traditional financial markets. Our findings have implications for financial market development, economic policy, and investment strategies in an increasingly digitalized global economy.

Keywords: Cryptocurrency adoption; Stock market capitalization; Cross-country analysis; Financial markets; Economic development (search for similar items in EconPapers)
JEL-codes: G00 (search for similar items in EconPapers)
Date: 2024-08-22
New Economics Papers: this item is included in nep-fdg, nep-fmk, nep-mac and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/121792/1/MPRA_paper_121792.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:121792

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().