Financial Market Effects on Cryptocurrency Volatility: Symmetric and Asymmetric Evidence from the USA and Japan

This study is the first to scientifically investigate stock indexes and currency exchanges that affect crypto prices. The purpose is to distinguish between the USA-Japan stock markets and the currency market's short- and long-term effects on bitcoin and ethereum. Auto Regressive Distributed Lag (ARDL) is used to analyze weekly series from 1-1-2016 to 20-10-2024. An asymmetric error-checking framework employing non-linear ARDL statistical approach to study variables affecting bitcoin and ethereum prices. Bitcoin appear to have short- and long-term linear effects on the US-Japan stock markets. Euro, GBP, and USA-Japan stock markets exhibit short-term linear effects with ethereum. Ethereum linearly affects GBP. This research helps exchange brokers and crypto traders diversify their holdings, reduce stock index and currency exchange risk, and accurately predict bitcoin and ethereum price variations.