The quantitative crypto-Fund Strix Leviathan that Bitcoin is probably not a hedge against economic uncertainty – in the light of the nearly unprecedented sell-out of the equity markets in the past week, where the S&P 500 suffered the strongest correction since the 2008 financial crisis, and BTC has lost almost 15 percent in USD.
The crypto-currency no 1 by market capitalisation, started in the 19th century. To overthrow in February with the S&P, as, due to the novel Coronavirus-market panic set in. With almost 3,200 deaths and 91,000 reported cases of the Virus in 85 countries, the pandemic seems to have on the global markets, a flight to safety triggered.
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There is no digital Gold?
Bitcoin could strengthen in the last few months, his reputation as a high-risk Well, and many of had the correlation of the Coins with Gold in January after the fatal drone attack by the United States to the Iranian commander-in-chief of the military mentioned.
At the time, has been argued by analysts such as Andrew Kang, that the price movement of Bitcoin during the US-Iran-have proven affair that the market has “strengthened his Faith” in BTC as a store of value and a hedge against macro-economic uncertainty “had”.
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Risky investment or not? Might be too early for a verdict
However, the recent downward trend of Bitcoin suggests, according to the Strix to the fact that the so-called “digital Gold” during high-risk market cycles, perhaps, but no less “prone to panic” than other Assets.
Gold, a prototype risk-free asset, has developed during the Coronavirus crisis, as expected, as investors have abandoned stocks in favor of defensiverer positions.
24. February, only four days after the S&P crashing started, broke out of Gold and reached a seven-year high.
The Seattle-based Quant Fund, it is explained now: Both Bitcoin as well as Ethereum are affected by the global flight to safety, as they are, because of their volatility, “poor currencies” (Ethereum crashed during the global Sell-offs to 25 percent).
Ultimately, the Hedge Fund, however, is that it is simply too early to make a judgment about whether these crypto-currencies fraught with risk or risk free investments apply.
Quant-Fund writes the following about Bitcoin:
“Some experts pointed out in January that Bitcoin behaves like a risk-free asset, as proof of its Status as a safe haven and a store of value. Others pointed to the high-risk behavior with crypto pursued shares in February, as proof of its Status as a speculative investment.“
The competitive behavior is not signaling that the market doesn’t know what Bitcoin would be used in the full implementation, let alone, “what will be the other thousands of crypto-assets in the end.”
After the outbreak of the Virus, BTC seems to be the market participants are confused and this “competing behaviors” to have more inspired. Crypto-Analyst and Trader, Alex Kruger, for example, explained that he had traded Bitcoin in the past few weeks as a “clear Risk”.
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But a measure that provides more clarity about the representation of Bitcoin as a store of value (if perhaps not as a safe haven, or “risk-free” store of value), is a risk-adjusted rate of return.
Despite the recent downturn, BTC has to keep therefore his Status as an asset with the best performance according to Sharpe Ratio – Gold, stocks, US real estate, Oil, bonds and emerging-market currencies.