Connectedness between sectoral cryptos and counterpart stocks
Year: 2025
Type: article
Abstract: This study examines the interconnection between sectoral cryptocurrencies and their corresponding stocks across 14 industries from 2022-2024. Using wavelet coherence, we evaluate crypto-stock interconnectedness across multiple investment frequencies and timescales and identify cross-sector patterns using k-means clustering of coherence maps. We conduct two types of analyses: (1) a within-sector dynamics, assessing time-varying connectedness between each crypto-stock pair; and (2) cross-sector grouping to uncover common regimes. Results show weak, fragmented, and short-lived in cloud computing, telecommunications, gaming and gambling, with only sporadic bursts. In contrast, supply chain and education exhibit strong, persistent long-term coherence. Insurance, cybersecurity, and e-commerce display episodic, event-driven coherence, with peaks around policy shifts and major sector news. These findings highlight that crypto-stock connectedness is sector- and horizon-dependent rather than uniform. The evidence informs sector-specific risk management, portfolio construction, and timing of tokenisation strategies, and supports more tailored regulatory oversight.
Source: Cogent Economics & Finance
Authors: Ismail Adelopo, Xiaojun Luo, Sony Stephen
Institution: University of the West of England
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $1,165
OpenAlex ID: W4413429668