Analysis of the Relationship Between Volatility and Financial Stability in Cryptocurrency Market

Yunping Sun; Chunmiao Jin; Yuchen Jiang; Xinyue Zhang

doi:10.59429/paat.v5i3.1375

Yunping Sun Department of Finance and Economics, Shandong University of Science and Technology
Chunmiao Jin Department of Finance and Economics, Shandong University of Science and Technology
Yuchen Jiang Department of Finance and Economics, Shandong University of Science and Technology
Xinyue Zhang Department of Finance and Economics, Shandong University of Science and Technology

DOI: https://doi.org/10.59429/paat.v5i3.1375

Keywords: Cryptocurrency Markets; Volatility; Financial Stability; Regulatory Mechanisms; Risk Management

Abstract

With the rapid development of cryptocurrencies, the volatility of their markets has emerged as a growing concern, especially in terms of financial stability. Through an analysis of the correlation between the cryptocurrency market volatility and financial stability, this paper explores the connections and disparities between cryptocurrencies and traditional financial markets, along with their commonalities and impacts. The study reveals that while the cryptocurrency market's volatility carries uncertainties and risks, it also brings greater opportunities and vitality to the financial market. Therefore, it is necessary to establish a sound regulatory mechanism and risk management system for a more stable cryptocurrency market, and it is also essential to strengthen education and market awareness campaigns towards the risk and understanding of the cryptocurrency market.

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