Crypto-currencies and Stock Market Performance: Evidence from the Nigerian Stock Exchange Market

ARIYIBI MAYOWA EBENEZER

Abstract


The COVID-19 era ushered in new investment options and payment systems within the global financial system, this investment option operates independently of the economic stock market. Studies have remained inconclusive if the virtual asset is a substitute or complement that can improve the overall performance of the stock market. Due to this lacuna, this study examines the quantile and conditional mean impact of crypto-currencies on stock market performance in Nigeria. The secondary data was monthly data for (60) months from 31st January 2019 to 31st December 2023. The study was anchored on the financial innovation theory of Schumpeter. The VECM (Vector error correction model) and the Quantile regression technique were the econometric techniques used to draw inferences from the outcome and explanatory variables. The VECM findings revealed that 77.5% of the variance in all share index are explained by their shocks, while BIT (Bitcoin), BNB (Binance smart index), ETH (Ethereum), and LIT (Litecoin) jointly explain positive variation in the all share index performance. Specifically BIT (Bitcoin), contributed 5.58%, BNB (Binance smart index) contributed 7.43%, ETH (Ethereum) contributed 3.64% and Litecoin contributed 5.86%. The Quantile regression technique revealed that cryptocurrencies (Bitcoin, Binance smart index, and Ethereum) have positive and negative significant effects on all share indexes at the upper, middle, and lower bound periods. The study recommended that investors and corporate organization pay attention to the new normal in finance since this asset have also ushered in the Fintech innovation in the financial system.


Keywords


Crypto-currencies; Stock market performance; Vector error correction model; Quantile regression technique

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International Journal of Commerce and Finance is licensed under a Creative Commons Attribution-NonCommercial-4.0 International (CC BY-NC 4.0) License.
 

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