[DigitalToday reporter Jinju Hong (홍진주)] Academic research has again confirmed the factors behind cryptocurrencies, including XRP, moving up and down with traditional financial markets during crises.
On April 27, blockchain outlet The Crypto Basic reported that the study found crypto remains under the influence of the traditional financial system, contrary to expectations it has become an independent investment. It said the tendency strengthens as global uncertainty increases.
The study analysed mutual effects between cryptocurrencies and major financial assets based on daily data over about eight years from January 2018 to March 2026. It covered seven asset groups including cryptocurrencies: stock indexes, sovereign bond yields, foreign exchange, commodities and credit default swaps (CDS), for a total of 70 financial time series.
The analysis found that leadership in determining market direction still lies with traditional finance. In particular, stock indexes, sovereign bond yields and CDS acted as key variables leading overall market flows, while cryptocurrencies largely reacted to them.
XRP and bitcoin (BTC), for example, tended to react and move in response to external shocks rather than lead the market. When macro events such as sharp falls in global stock markets, interest rate hikes and inflation concerns occurred, the structure in which crypto prices moved in tandem was repeatedly confirmed.
Another notable point was that influence relationships across markets are not fixed. The study found that 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. The measure of influence from cryptocurrencies to stocks changed from around 0.0003 before COVID-19 to -0.0008 during the pandemic period.
The researchers interpreted these changes as the result of stronger inter-market connectivity. They said as global shocks expanded, such as inflation, wars and an energy crisis, boundaries between asset groups blurred and cryptocurrencies were not free from such shocks. They also found a clear pattern in which changes in interest rates, credit risk and liquidity were reflected in stock markets first and then followed by cryptocurrencies.
The study also concluded that after COVID-19, the integration of crypto markets into traditional finance became more pronounced. It said cryptocurrencies no longer move as an isolated market but behave like risk assets similar to stocks, and spillover effects across markets have strengthened. It judged that in crises, the role of crypto can temporarily grow, but overall traditional financial markets still hold the steering wheel.
The study used transfer entropy (TE) and independent component analysis (ICA) techniques to closely track information flows among assets. It found that even after removing coincidental correlations, the dominance of traditional finance persisted.
As a result, the range of variables XRP investors need to watch has widened. Policy decisions, financial market stress and global economic conditions can directly affect XRP prices. The study concluded that XRP and other cryptocurrencies remain in a follower stage, and it found that future price moves may be driven not only by issues inside the crypto industry but also by Wall Street and macroeconomic trends.
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