Cross-Market Integration

Definition ∞ Cross-Market Integration describes the increasing interconnectedness and interdependence between different financial markets, including traditional and digital asset markets. This phenomenon results in price movements or trends in one market influencing others. It signifies a reduction in market isolation and an increase in systemic correlation. Such integration can affect liquidity, risk assessment, and overall market stability.
Context ∞ The state of Cross-Market Integration is a frequent topic in financial news, especially concerning the growing influence of digital assets on conventional markets. Debates often center on the regulatory implications of this interconnectedness and the potential for contagion during periods of market stress. A critical future development involves developing robust analytical models to assess and manage the systemic risks arising from this integration.