EXAMINING THE IMPACT OF CRYPTOCURRENCY ON STOCK MARKET RETURNS: EVIDENCE FROM THE PAKISTAN STOCK EXCHANGE (KSE-100 INDEX)

Abstract

This study examines the impact of cryptocurrency returns on stock market performance in Pakistan using monthly data from 2015 to 2025. The KSE-100 Index is analyzed against Bitcoin, Ethereum, and Tether (USDT) returns, along with exchange rate and trading volume as control variables. Ordinary Least Squares (OLS) regression results reveal no significant relationship before COVID-19; however, post-pandemic data show a strong positive link between Ethereum and KSE-100 returns, while Bitcoin remains insignificant. The exchange rate also became a significant factor, indicating increased macro-financial integration. Overall, findings suggest that Pakistan’s stock market has grown moderately connected with global digital-asset movements after COVID-19.