The closer quants look, the less diversifying crypto appears
Analysis seems to confirm that the asset class is not an effective diversification play
This year’s cryptocurrency collapse, which occurred as selloffs were taking place in stocks and bonds, has cast doubt on the asset class’s credentials as a source of diversification.
Newly published research by a range of market observers appears to confirm that crypto reacts in the same way as other investments to factors such as macroeconomic shocks, political risk and volatility in mainstream markets.
“Most investors think of crypto assets as a good hedge because they assume that the
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