Bitcoin's Effect on Selected Crypto Assets: Quantitative Evidence

The main objective of the study is to systematically investigate the effects of Bitcoin on specific crypto assets. In this context, a sample of 135 observations between 2020W01 and 2022W33 for seven crypto assets with the highest value in the financial markets, including Ethereum, Tether, USD Coin, BNB, XRP, and Cardano, has been included in the study sample. These crypto assets, along with Bitcoin, constitute almost 95% of the total crypto asset portfolio. This situation increases the importance of representing a broad universe in the study and contributes to the academic literature. To examine the effects of Bitcoin on the selected crypto assets, a Multivariate Dynamic VAR Model has been used. The model assumes causality among variables. Variables that do not meet this assumption have been excluded from the study sample. The results of the study demonstrate that Bitcoin exhibits significant and one-way effects on all cryptocurrencies. However, the impact of other crypto assets on Bitcoin has been negligible. In this context, it is emphasized that investment decisions obtained from two-way evaluations may be risky and misleading. In order to reduce investment risks for crypto assets to more acceptable levels, the use of comprehensive analysis methods is recommended.