Co-movements of the top cryptocurrencies: new insights from waveletcoherence analysis

This paper makes use of wavelet coherence analysis to investigate dynamic comovements between the most prominent cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), Tether (TETH), and Ripple (XRP), based on market capitalization utilizing daily prices from 1 January 2018 to 20 May 2025. The analysis reveals new insights into multi-scale connections and uncovers heterogeneous synchronization patterns. The Bitcoin with Ethereum and Bitcoin with Binance pairs demonstrate robust and stable coherence underpinned by market-specific and systemrelated factors. The relationship between Bitcoin and Tether appears weaker and counter-cyclical, serving to identify the stabilizing influence of Tether. The event-driven nature of the coherence between Bitcoin and Ripple, primarily driven by regulatory news, rounds out the results. These results shed light on system risk and influence diversification strategies and regulatory intervention across cryptocurrency markets.