Comparison between capital market in Thailand and digital asset markets

Abstract

This thesis aims to compare the capital market in Thailand with the emerging digital asset markets. The study provides a comprehensive analysis of the two markets, including their regulatory frameworks, market size, liquidity, trading volume, and investment opportunities. The research finds that while the capital market in Thailand is highly regulated, with a well-established legal framework, the digital asset market operates in a relatively less regulated environment. The capital market has a larger market size and trading volume, with a more diverse range of investment products, while the digital asset market is still in its early stage of development, with limited investment products. The study analyzes the daily data of popular assets in Thailand such as gold, oil, the SET50 index, THB/USD exchange rate, and various cryptocurrencies including Bitcoin, Ethereum, Litecoin, Ripple, DASH, Stellar, BNB, and DOGE. To determine the correlations between these assets, a matrix approach is used with the Pearson correlation coefficient, and the shortest route between assets is determined with the help of a minimal spanning tree model and random matrix theory. The study also shows that both markets have their strengths and weaknesses. While the capital market provides stable and reliable investment opportunities, the digital asset market offers higher returns but comes with higher risks. Moreover, the liquidity of the two markets is also different, with the capital market having higher liquidity due to the involvement of institutional investors. The study also suggests that including alternatives to the SET50 and DOGE in an investment portfolio during the coronavirus period may offer opportunities for risk diversification.