CRYPTOCURRENCY MARKET DYNAMICS AND FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA
Keywords:
Blockchain Technology, Bitcoin, Ethereum, Binance, Ripple, Financial PerformanceAbstract
This study examined the effect of cryptocurrency market indicators on the financial performance of deposit money banks in Nigeria. Specifically, the study investigated the influence of Bitcoin, Ethereum, Binance Coin, and Ripple on profitability measured by Return on Assets (ROA). An ex-post facto research design was adopted, utilizing secondary data obtained from the published annual financial reports of selected deposit money banks. The dataset comprised annual panel data covering the period 2013 to 2022. Given the continuous nature of the dependent variable (ROA), panel data regression techniques, including fixed effects and random effects models were employed for hypothesis testing. The empirical results revealed that Bitcoin exerts a negative and statistically significant effect on ROA (β = -35.1002, p = 0.045). Ripple also demonstrates a negative and statistically significant effect (β = -12.00056, p = 0.000). In contrast, Ethereum shows a positive but statistically insignificant effect (β = 1.634773, p = 0.924), and Binance Coin exhibits a negative but statistically insignificant influence (β = -12.90311, p = 0.347). The findings, therefore, indicate partial significance among the cryptocurrency indicators, with Bitcoin and Ripple significantly influencing bank profitability during the study period. The study concludes that cryptocurrency market dynamics have differential effects on the financial performance of deposit money banks in Nigeria.
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