Risk Profile of Crypto Markets Similar to Oil and Tech: Coinbase
Hedge against traditional market? No, crypto assets are now approaching the risk profile of oil and gas, or electric vehicle stocks like Tesla, says Coinbase Institute chief economist.
New
Despite some touting crypto as a hedge against traditional markets, digital assets today share a similar risk profile to commodities such as oil and gas, and tech and pharmaceutical stocks, according to analysis by Coinbase's chief economist.
The observation comes from a blog post by Coinbase Chief Economist Cesare Fracassi on Wednesday, noting that the “correlation between stock and crypto-asset prices has increased significantly” since the 2020 pandemic.
“While during the first decade of its existence, Bitcoin returns were on average uncorrelated with stock market performance, the relationship has grown rapidly since the onset of the COVID pandemic,” said said Fracassi:
“In particular, crypto assets today share similar risk profiles to oil commodity prices and tech stocks.”
The economist referred to his institute's monthly news report in May, which revealed that Bitcoin (BTC) and Ether (ETH) have similar volatility to commodities such as natural gas and oil, fluctuating between 4% and 5% on a daily basis. basis.
Since 2020 the correlation between crypto and the stock market has increased and with recent market movements we see how the market expects that crypto assets will become increasingly more intertwined with the rest of the financial system in the future. (4/5)
— Cesare Fracassi (@CesareFracassi) July 5, 2022Bitcoin, often referred to as digital gold, has a much riskier profile compared to its...
Hedge against traditional market? No, crypto assets are now approaching the risk profile of oil and gas, or electric vehicle stocks like Tesla, says Coinbase Institute chief economist.
New
Despite some touting crypto as a hedge against traditional markets, digital assets today share a similar risk profile to commodities such as oil and gas, and tech and pharmaceutical stocks, according to analysis by Coinbase's chief economist.
The observation comes from a blog post by Coinbase Chief Economist Cesare Fracassi on Wednesday, noting that the “correlation between stock and crypto-asset prices has increased significantly” since the 2020 pandemic.
“While during the first decade of its existence, Bitcoin returns were on average uncorrelated with stock market performance, the relationship has grown rapidly since the onset of the COVID pandemic,” said said Fracassi:
“In particular, crypto assets today share similar risk profiles to oil commodity prices and tech stocks.”
The economist referred to his institute's monthly news report in May, which revealed that Bitcoin (BTC) and Ether (ETH) have similar volatility to commodities such as natural gas and oil, fluctuating between 4% and 5% on a daily basis. basis.
Since 2020 the correlation between crypto and the stock market has increased and with recent market movements we see how the market expects that crypto assets will become increasingly more intertwined with the rest of the financial system in the future. (4/5)
— Cesare Fracassi (@CesareFracassi) July 5, 2022Bitcoin, often referred to as digital gold, has a much riskier profile compared to its...
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