Cryptocurrencies Remain Under Influence of Traditional Finance During Crises

A study published by The Crypto Basic has shed light on the relationship between traditional financial markets and cryptocurrencies during times of crisis.

The research analyzed data from 2018 to 2026 and found that stock indexes, sovereign bond yields, and credit default swaps act as key variables leading market flows. This means that XRP and other cryptocurrencies tend to react to external shocks rather than lead the market.

The study also found that influence relationships across markets are not fixed and can change over time. Before the COVID-19 pandemic, stock markets influenced other asset groups in a one-way structure, but during the pandemic, some influence shifted to cryptocurrencies.

This blurring of boundaries between asset groups means that XRP investors need to pay attention to a broader range of factors, including policy decisions, financial market stress, and global economic conditions. In crises, the role of crypto can temporarily grow, but overall traditional financial markets still hold the steering wheel.