NYDIG Financial Services says that the parallel movements of Bitcoin with US Software Stocks are more a result of exposure to macroeconomic events than a convergence in structure.
Bitcoin has been a hot topic in the news this week.BTC) rallied alongside US software stocksGreg Cipolaro was the research head at NYDIG. said On Friday, I sent a short note.
“While the visual fit of their indexed price is compelling, the conclusion that Bitcoin and software equities have structurally converged, or that they share common exposure to themes such as AI or quantum risk, is overstated,” “He said”
Cipolaro has added a tandem rally “more plausibly reflects shared exposure to the current macro regime, specifically long-duration, liquidity-sensitive risk assets, rather than evidence of a structural convergence between Bitcoin and software equities.”
Bitcoin is a cryptocurrency that has a price. “unexplained by equities”
Bitcoin and Bitcoins software stocks has increased on a 90-day rolling basis since its all-time high above $126,000 in early October, but Cipolaro said its correlations with the S&P 500 and Nasdaq have also recently risen, indicating that “the change is not isolated to software stocks.”
Even with Bitcoin’s correlations The two software indices and stocks are a good place to start. “the majority of Bitcoin’s price movement remains unexplained by equities,” Cipolaro added.
According to him, only 25% of Bitcoin price fluctuations can be explained statistically by correlations with the stock exchange, and at least 75% are affected by factors other than traditional stock indexes.
Cipolaro reported that Bitcoin does not appear to be priced at the same level as other currencies. hedge against macroeconomic conditionsWhat is the explanation? “the ongoing frustration around Bitcoin’s failure to ‘act like gold’ despite the digital gold label.”
Related: Bitcoin drops 2% as oil prices surge on energy shortage fears
He said that investors appear to allocate to assets along the risk curve rather than purchasing Bitcoin for a specific price. “distinct monetary thesis.”
Cipolaro asserted, however, Bitcoin’s market structure is distinct, as are its economic drivers. It cited the network activity, adoption trends and regulatory developments, which make Bitcoin different from other assets.
“That differentiation supports bitcoin’s role as a portfolio diversifier,” “He said” “While cross-asset correlations with equities are currently elevated, they remain far from determinative of bitcoin’s returns.”
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Source: cointelegraph.com
