Make earnings with no risk
Automated AI-driven system makes the trades, you earn the money
Join now

Crypto Correlation With Other Variables Affects Diversification Gains – Goldman 

Abstract photo of FINTECH connection over the digital number on dark blur background, Showing the cryptocurrency or digital money, Fintech concept

Goldman Sachs analysts say that the mainstream adoption of cryptocurrencies causes a correlation with other financial instruments that affect diversification benefits.

Source: Coindesk

BTCUSD is down-0.86%, GS: NYSE is down -0.98% on premarket

Analysts led by Zack Pandl notes that bitcoin is positively correlated with inflation hedge assets and technology stocks. It adds that the digital asset is negatively correlated to the real interest rate and the USD.

The bank observes that the recent plunge in Bitcoin was linked to the correction in the tech stocks triggered by the anticipated Federal Reserve interest rate hike.

The drop caused a domino effect in altcoins and reduced borrowing and lending activities in the DeFi networks, where the asset is used as collateral.

Goldman says that projects like metaverse may sustain the assets in market volatilities but may not hold against macroeconomic variables.

The analysts maintain that the 40% crypto market plunge since November was caused mainly by macroeconomic factors.


BSTX Bags SEC Approval for Blockchain-Based Securities Exchange

Previous article

German Economy Ends 2021 With Economic Contraction

Next article

You may also like


Leave a reply

Your email address will not be published.

More in News