Modeling the effects of bitcoin, gold, inflation, and USD/TL exchange rate on BIST100 movements

inflation rate and exchange rate volatility alongside the increase in interest towards investments within the cryptocurrencies market. This study examines how Bitcoin prices, gold prices, Turkey’s Consumer Price Index, and USD/TL exchange rate affected the returns and volatility of the BIST 100 stock market between February 2021 and March 2025. Methodology- This article applies various econometric models, which include E-GARCH, Markov regime-switching, Bayesian impulse response analysis. Findings– E-GARCH analysis reveals that the effect of Bitcoin and gold prices on the volatility of BIST 100 is insignificant, while the effect of Turkish CPI and USD/TL exchange rate is significant and positive. The analysis of the Markov regime-switching model reveals that for the first regime (high volatility), BIST 100 returns are only influenced by USD/TL. In the second regime (low volatility), the significant negative impact is caused by Bitcoin, while the positive impacts are caused by gold, USD/TL exchange rate, and inflation on BIST 100 returns. The Bayesian impulse response analysis reveals that the initial positive impacts are caused by Bitcoin, USD/TL exchange rate, and CPI, while the impact of gold is negative. At the start of Bayesian impulse response analysis, the largest positive impact is caused by Bitcoin, which decreases as the influence of the USD/TL exchange rate increases. At the end of analysis, the impact of Turkish CPI is found to be the largest on BIST 100 returns. Conclusion- On the whole, the results indicate that although Bitcoin and gold have differential effects on BIST 100 returns depending on market conditions, the primary determinants of BIST 100 returns are the inflation rate and USD/TL exchange rate