“EXPLORING THE DYNAMIC NEXUS BETWEEN DIGITAL FINANCE, ARTIFICIAL INTELLIGENCE AND GCC STOCK MARKETS: A WAVELET-BASED APPROACH.”

Abstract

This paper analyzes the dynamic effect of cryptocurrencies (Bitcoin and Ethereum),

KBW Nasdaq FinTech and Nasdaq Artificial intelligence Index on the financial market of the GCC countries: UAE, Saudi Arabia and Bahrain through the application of the wavelet methodology. The study used the CMWT on time-series data from 01 March 2020 to 28 Feb 2025, for the purpose of identifying multi-scale co-movements and volatility patterns between digital currency and regional financial stocks. Empirical findings demonstrate time-varying dependence the dependence was also found to be substantially stronger during bearish and bullish times also in technology booms. The paper draws attention to the increasing dominance of new technologies in the Gulf’s financial markets and offers practical tips to policy makers as well as investors for creating flexible strategies and regulatory structures.