article · Heliyon
Expectations around Bitcoin halving events significantly influence exchange rates and equity markets while interacting with monetary policy transmission. Analysis across 41 countries between 2012 and 2021 reveals that halving expectations generate short-term anticipatory asset accumulation, creating initial upward price pressure followed by price expansion and eventual cyclical adjustments. This cyclical movement provides a distinct conduit transmitting cryptocurrency dynamics into traditional financial systems. Over the long run, the resultant impacts on exchange rates and stock prices are predominantly negative, with equity markets experiencing the most pronounced effects. Furthermore, halving expectations weakly dampen the transmission of monetary policy operating through the stock-price channel. Regulatory frameworks governing cryptocurrencies, however, mitigate this transmission disruption, highlighting the necessity for central banks to track halving cycles when managing financial stability.
As digital assets become deeply entwined with the global economy, predictable events like Bitcoin halvings can ripple across standard financial systems. Understanding how these expectations alter share prices, currency values, and central bank monetary actions helps policymakers, investors, and regulators safeguard macroeconomic stability against crypto-market volatility.
This research represents early-stage macroeconomic analysis that can inform central banks, financial regulators, and institutional risk analysts. It offers empirical evidence to assist in designing targeted cryptocurrency regulations and calibrating monetary policy models against digital asset cycles. The work is analytical rather than a direct commercial product, providing an empirical baseline that regulatory technology developers and central banks could integrate into economic forecasting and risk-monitoring systems.
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This article focuses on the impact of bitcoin halving expectations on exchange rates and stock prices, while assessing their potential to disrupt the transmission of monetary policy. Using monthly panel data from 41 countries between 2012 and 2021, the formulated hypotheses were tested using four approaches: the Common Correlated Effects-Auto Regressive Distributed Lag (CCE-ARDL) approach, the Fixed Effect Robust Error Standard of GMM, the Quantile Regression approach, and the Bayesian Vector Autoregressive approach. The results reveal a dynamic pattern around Bitcoin halving episodes. Halving expectations are associated in the short run with anticipatory accumulation and an initial build-up of upward price pressure, followed by price expansion associated with the Bitcoin halving cycle and subsequent cyclical adjustment. This Bitcoin price-cycle dynamic provides a channel through which halving expectations are transmitted to traditional financial markets. The effects on exchange rates and stock prices are predominantly negative in the long run and vary across Bitcoin market phases and country groups, with stronger effects observed in equity markets. Halving expectations also weakly moderate monetary policy transmission through the stock-price channel, while cryptocurrency regulation mitigates this effect. These findings distinguish our study from work analysing the link between financial markets and cryptocurrencies, as well as from research on the relationship between monetary policy and the market. It is crucial that central banks, especially in developed countries, closely monitor these events.
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DOI: 10.1016/j.heliyon.2026.e45402
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