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Cryptocurrency industry and the leading cryptocurrency, Bitcoin (BTC), managed to become the most noteworthy asset class in recent years. While it may not reach the total market value of traditional markets, it can be said to be as popular as stock markets or commodities in terms of popularity. This naturally led to repeated discussions about whether there was a causality relationship between various indices, commodities and BTC. Sometimes BTC moves parallel to important indices like DXY or S&P 500, and sometimes it does not. A recent article published by Bolu Abant İzzet Baysal University (BAİBÜ) discusses the causality relationship between the BIST100 index and BTC.
BTC Study by Turkish Academics
According to recent research, it seems there is no causality relationship between Bitcoin and the BIST100 index. The research, published by Mert Baran Tunçel, Yaşar Alptürk, Mehmet Akif Altunay and İsmail Bekci, is based on significant data. The study tested the effect of Bitcoin on the BIST100 index.
Bitcoin was considered as the independent variable and the BIST100 index as the dependent variable. The stationarity analysis of the series in the study was tested through the Lee Strazicich unit root test that considers structural breaks. The researchers then tried to determine the causality relationship between the variables using the Toda-Yamamoto test, which rectifies the deficiencies and problems in the Granger causality test.
The results of the scientific studies showed that there is no causality relationship between Bitcoin and the BIST100 index. This means that changes in the Bitcoin price do not have a significant effect on the BIST100 index. Similarly, it was found that changes in the BIST100 index also do not have a significant effect on Bitcoin prices.
No Causality Between BTC and BIST100
These findings can be stated as an important factor that investors should take into account when shaping their strategies towards cryptocurrencies. When determining the place of Bitcoin and other cryptocurrencies in investment portfolios, it should be considered that these assets do not have a direct relationship with traditional financial markets, at least in Turkey.
