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A study from the Federal Reserve Bank of Chicago says that trying to choose profitable cryptocurrencies from those that are not is not worthwhile due to high correlation.
Source: Bloomberg
BTCUSD is up +3.75%
Prices in cryptocurrencies move in a similar direction and are driven by shocks given the interconnected market.
The bank’s senior economist, Filippo Ferroni, notes that it is challenging to set a diversified portfolio in the cryptocurrency market given the complexity of risk management.
The study comes as cryptocurrencies attempt a rebound amid the Russian aggression in Ukraine and the interest rates hikes in the west.
The study also reveals that a part of the price dynamics is attributed to the individual characteristics of the virtual assets despite the high correlation.
Ether has recorded a slightly higher surge than bitcoin, which is trading in a range. The positive gains in the ether are connected to the technical upgrade and anticipated transition to the proof-of-stake.
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