Does bitcoin act like digital gold? Embarrassingly, it moves in close correlation with risky stocks

South China Morning Post

Repost from 9-24-2021

graphic image of a melting bitcoin“When Wall Street makes the case for cryptocurrencies, it’s all about the benefits of diversification. But when markets go down, bitcoin has an embarrassing habit of getting swept up in the sell-off.”

USAGOLD note: The cryptocurrencies also tag along for the ride when stocks bolt higher. Most students of the financial markets will attest to cryptocurrencies behaving like risk assets, i.e., they act more like speculative stocks than stores of value. They certainly do not follow gold …… As this article points out, when investors derisk their portfolios they “start dumping cryptocurrencies.”

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