Financial institution of America has debunked the argument that Bitcoin can perform as a portfolio diversifier
Financial institution of America, one of many largest banking establishments within the U.S., has demonstrated that Bitcoin can’t function an inflation hedge in its most up-to-date analysis paper.
The cryptocurrency retains buying and selling in tandem with the U.S. shares regardless of being promoted as a protected haven asset by its ardent supporters. In actual fact, the correlation between Bitcoin and the tech-focused Nasdaq 100 inventory market index not too long ago reached one more all-time excessive.
Bitcoin’s latest value motion has been primarily pushed by macroeconomic situations. As reported by U.At present, the U.S. Federal Reserve determined to hike the benchmark rate of interest by 50 foundation factors for the primary time in 22 years on Wednesday, reaffirming its bullish stance.
Earlier as we speak, the world’s largest cryptocurrency dipped to $35,268, the bottom stage since Feb. 24.
Bitcoin is down virtually 48% from its all-time excessive of $69,044, severely underperforming in 2022 after recording substantial returns final yr.
The highest cryptocurrency is down 21.4% for the reason that begin of this yr. For comparability, gold, which stays the highest safe-haven asset for buyers, is definitely up 2.88% year-to-date.
The U.S. greenback has thus far been the largest winner in 2022. The DXY index, which measures the energy of the dollar in opposition to different high fiat currencies, soared to one more multi-decade excessive earlier as we speak.
Earlier as we speak, Galaxy Digital CEO Mike Novogratz opined that tech shares have been but to backside out, which means that there’s probably extra ache in retailer for crypto as properly.
Whereas those that joined the Bitcoin celebration in 2021 is perhaps underwater, the vast majority of wallets stay in revenue, Glassnode knowledge reveals. In 2019, Financial institution of America named Bitcoin the best-performing asset of the last decade.