How Digital Assets and Housing Markets React in Crises

Recent global events like the digital revolution, health crises, and economic turmoil have shaken up both digital and traditional asset markets, changing how we invest. This study looks at how Non-Fungible Tokens (NFTs), Decentralized Finance (DeFi) assets, and the housing market interact during extreme events. From March 5, 2018, to January 8, 2024, major events like the Bitcoin Price Crash in 2018, COVID-19, the global drop in oil demand in 2020, and the Russia-Ukraine War were studied.

In normal times, NFTs and DeFi assets have a weak link to the housing market. But during extreme market conditions, whether good or bad, their connection strengthens. Interestingly, digital assets often send shocks to the housing market, which absorbs them. Investors, portfolio managers, and policymakers should pay close attention to both digital financial assets and the housing market, especially during crises, to build better portfolios and create effective policies.

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