Identifying Extreme Connectedness among Islamic Cryptocurrencies and Digital Tokens: Portfolio Implications

Identifying Extreme Connectedness among Islamic Cryptocurrencies and Digital Tokens: Portfolio Implications | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Article Identifying Extreme Connectedness among Islamic Cryptocurrencies and Digital Tokens: Portfolio Implications Hasan Hanif, Muhammad Irfan Rafique This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8952612/v1 This work is licensed under a CC BY 4.0 License Status: Under Review Version 1 posted 15 You are reading this latest preprint version Abstract Purpose – The study evaluates the connectedness among the less riskier Digital Assets by investigating the functions of gold backed cryptocurrency alongwith Fan Tokens, Non-fungible Tokens and Real estate tokens, as a new alternative asset class that can be utilized by portfolio managers and investors alongwith policy makers. Design/methodology/approach – This study uses Quantile Vector Auto Regression analysis to measure the quantile cohesiveness among Islamic Cryptocurrencies, Non-Fungible Tokens, Fan Tokens and Real Estate Tokens, recommended by Ando et al., (2022) given extreme quantiles, which specify tail features among different markets performing under extreme conditions. The quantile cohesiveness proposed by Ando et al. (2022) is the blend of quantile vector auto regression with Diebold and Yilmaz (2012) methodology of spillovers for measuring the cohesiveness of the volatilities of markets for extreme higher (95th) and extreme lower (5th) quantiles. Findings – The findings of the QVAR divides spillover in two market condition i.e. median and extremes. In median market condition or we can say normal conditions findings of QVAR shows that Fan token is the major transmitter of shocks while Islamic crypto like X8X is major receiver of the shocks. In extreme condition the major transmitter remains the same i.e. Fan Tokens but major receiver of shock is Real Estate Tokens. Originality/ Value: – Study offer valuable insights to policy makers, portfolio managers and individual investors. For instance study enable the portfolio managers and investors to understand spillovers among Islamic Crypto, Non-Fungible Tokens, Fan Tokens and Real Estate tokens, which will help them in making suitable portfolios. By investigating the function of Islamic gold-backed cryptocurrencies as a new and alternative asset class that can be utilized by both portfolio managers and investors, looking to invest in Islamic Products, to lower their risk of investment. Research Implications: - This study brings novel insight for portfolio optimization and diversification. The findings of this study will have implications for global investor, researcher and policy makers. Physical sciences/Mathematics and computing Physical sciences/Physics Decentralized Finance Centralized Finance Traditional Finance Islamic Cryptocurrencies Conventional Cryptocurrencies Quantile VAR Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Under Review Version 1 posted Editorial decision: Revision requested 06 May, 2026 Reviews received at journal 22 Apr, 2026 Reviews received at journal 08 Apr, 2026 Reviews received at journal 06 Apr, 2026 Reviews received at journal 02 Apr, 2026 Reviewers agreed at journal 19 Mar, 2026 Reviewers agreed at journal 18 Mar, 2026 Reviewers agreed at journal 18 Mar, 2026 Reviewers agreed at journal 17 Mar, 2026 Reviewers agreed at journal 17 Mar, 2026 Reviewers invited by journal 16 Mar, 2026 Editor assigned by journal 16 Mar, 2026 Editor invited by journal 04 Mar, 2026 Submission checks completed at journal 03 Mar, 2026 First submitted to journal 03 Mar, 2026 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8952612","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Article","associatedPublications":[],"authors":[{"id":607976522,"identity":"628fadce-373f-4a78-a29a-d80cd1e2f792","order_by":0,"name":"Hasan Hanif","email":"","orcid":"","institution":"Air University","correspondingAuthor":false,"prefix":"","firstName":"Hasan","middleName":"","lastName":"Hanif","suffix":""},{"id":607976523,"identity":"141e654e-0de0-4554-908e-a1c48cffef5c","order_by":1,"name":"Muhammad Irfan Rafique","email":"data:image/png;base64,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","orcid":"","institution":"Air University","correspondingAuthor":true,"prefix":"","firstName":"Muhammad","middleName":"Irfan","lastName":"Rafique","suffix":""}],"badges":[],"createdAt":"2026-02-24 04:38:55","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-8952612/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8952612/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":105034039,"identity":"69c69be6-e02c-49d9-bf7a-efc88be86418","added_by":"auto","created_at":"2026-03-20 07:22:29","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":991130,"visible":true,"origin":"","legend":"","description":"","filename":"FinalDraft.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8952612/v1_covered_8146d978-17f5-498a-a43d-583cb8508e0b.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Identifying Extreme Connectedness among Islamic Cryptocurrencies and Digital Tokens: Portfolio Implications","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"humanities-and-social-sciences-communications","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"palcomms","sideBox":"Learn more about [Humanities \u0026 Social Sciences Communications](http://www.nature.com/palcomms/)","snPcode":"41599","submissionUrl":"https://submission.springernature.com/new-submission/41599/3","title":"Humanities and Social Sciences Communications","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Nature AJ","inReviewEnabled":true,"inReviewRevisionsEnabled":false},"keywords":"Decentralized Finance, Centralized Finance, Traditional Finance, Islamic Cryptocurrencies, Conventional Cryptocurrencies, Quantile VAR","lastPublishedDoi":"10.21203/rs.3.rs-8952612/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8952612/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003e\u003cstrong\u003ePurpose\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e– The study evaluates the connectedness among the less riskier Digital Assets by investigating the functions of gold backed cryptocurrency alongwith Fan Tokens, Non-fungible Tokens and Real estate tokens, as a new alternative asset class that can be utilized by portfolio managers and investors alongwith policy makers.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eDesign/methodology/approach\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e– This study uses Quantile Vector Auto Regression analysis to measure the quantile cohesiveness among Islamic Cryptocurrencies, Non-Fungible Tokens, Fan Tokens and Real Estate Tokens, recommended by Ando et al., (2022) given extreme quantiles, which specify tail features among different markets performing under extreme conditions. 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