Even though crypto investments can be as volatile as or more volatile than traditional investments, digital currencies may still serve as a hedge against traditional investments because they are not tied to equity market movements.
Source quote, verbatim
Although crypto investments can to be just as and more volatile than traditional investments, digital currencies might be used to hedge against traditional investments.
Wulf A. Kaal, Blockchain Innovation for Private Investment Funds (2017). SSRN: https://ssrn.com/abstract=2998033
Holds when
holds to the extent crypto returns are uncorrelated with traditional stock and equity markets
Classification
mechanismsupport: arguedsystemic-risk
Related claims
restated_bykaal:claim:3409548-029 Digital currencies can serve as a hedge against traditional investments even though crypto investments can be ...
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