Motivated by the exponential growth of the cryptocurrency market and the need for more empirical work to understand the dynamics of the young financial market, this paper, through time- and frequency-varying techniques examines the extent of linkages between leading cryptocurrencies and diverse traditional assets of emerging economies. Using variants of the multivariate conditional heteroscedasticity models and a dummy, we assess the economic potential, each for Bitcoin and Ripple, from the perspective of an emerging market investor. The results, from both time and frequency analyses indicate that the two major cryptocurrency assets have not yet coupled with the emerging assets, as weaker to lower-moderate correlations characterise movements of the pairs. Additionally, our results unveil a multifaceted economic benefit of Bitcoin and Ripple, however, this varies across emerging asset classes (forex and equities), country-specific assets, and regional emerging market groupings. The findings hold some implications for investors, regarding portfolio diversification and risk management.

中文翻译：

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新兴市场中领先加密货币的动态联系和经济作用

受加密货币市场的指数增长以及需要进行更多实证工作以了解年轻金融市场动态的推动，本文通过时变和频率变化的技术研究了领先的加密货币与各种传统资产之间的联系程度。新兴经济体。使用多元条件异方差模型的变体和虚拟变量，我们从新兴市场投资者的角度评估了比特币和瑞波币的经济潜力。时间和频率分析的结果表明，这两种主要的加密货币资产尚未与新兴资产耦合，因为较弱到中度较低的相关性表征了货币对的走势。此外，我们的结果揭示了比特币和瑞波币的多方面经济效益，然而，这因新兴资产类别（外汇和股票）、特定国家资产和区域新兴市场分组而异。在投资组合多元化和风险管理方面，这些发现对投资者有一些影响。