Great visualization article from Bloomberg comparing crypto versus other asset classes from a risk, return, and correlation perspective. In terms of rockiness, you had to look at shares of Steinhoff International Holdings NV (the SA company embroiled in an accounting scandal) and bonds issued by Bank Otkritie FC (Russia’s biggest-ever financial bailout) to get the same volatility!
Cryptocurrencies have weak relationships with established asset classes, which can be good or bad depending on what role you want them to play in your portfolio. This could change if more institutional investors such as banks and hedge funds start buying digital tokens, but for now cryptocurrencies mostly just move in line with each other. That said, there’s a lot more activity in this space than a year ago, even though some newer investors have fled. “Anything that’s a $400 billion asset will not be ignored for long,” Dan Morehead, chief executive officer of $1 billion cryptocurrency hedge fund Pantera Capital Management LP, told Bloomberg TV last week.