The connectedness between cryptocurrency and segmented technology sectors in different regulatory regimes: causality and machine learning approaches

Governments worldwide have adopted varying policies towards cryptocurrency. In this study, we examine the connectedness between cryptocurrency prices and segmented technology sectors in China, the United States, and global markets with 13,225 observations made 26 January 2021–11 December 2023. Given differing regulatory policies, we find the effects of cryptocurrency on technology sectors do not exhibit a significant heterogeneity in terms of returns or volatility spillovers. Cryptocurrency dominates the network with technological innovation at country and global level markets. The results demonstrate that government-imposed cryptocurrency banning policies are limited in suppressing the impact of cryptocurrency. Using a machine learning GA2M algorithm, we find that the U.S. consumer digital services sector has the strongest impact on cryptocurrency returns, whereas software technology demonstrates a stronger interaction with cryptocurrencies than does the hardware sector. This suggests that investors and policymakers, regardless of regulatory stance, should closely monitor cryptocurrency price movements for informed decision-making in complex ecosystem environments.