
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
More on Trading
Chinese corporates shunned hedging during tariff upheaval
High hedging costs and increasingly stable spot rate meant exporters opted not to add FX hedges as RMB rose
For variation margin payments, cash is no longer king
Dealers are being pressed to accept corporate bonds and even equities as collateral for non-cleared trades
BNP Paribas eyes selective algo white label tie-ups
The French bank struck its first FX algo white-labelling partnership with Lloyds
Will Taiwan lifers ramp up FX hedging amid tariff convulsions?
As TWD remains strong against the US dollar, Taiwanese life insurers are still poised to act
Macro traders tread carefully ahead of tariff pause deadline
Uncertainty has held buy-siders back from both hedging and directional trades
Hedge funds return to HKD carry trade after May stop-outs
Widened interest rate differentials spur investors to re-enter positions, but risks remain
Why asset owners aren’t turning their backs on America (yet)
Pension and sovereign wealth investors see US exceptionalism outlasting policy-driven turmoil
Limited-loss hedges help US firms dodge costly FX moves
Structurers say US corporates’ use of options-based net investment hedging helped soften impact of USD selloff