Will Cryptocurrency Affect Down Markets?



Investors of every size make investments to hedge against stock market volatility. When stocks show problems in inflationary times, investors often turn to bonds. When federal taxes are a focus, they can balance a portfolio with tax-free Municipal Bonds. In the age of the NYSE joining strategically with Coinbase, the question occurs: how would a cryptocurrency market affect investor behavior during a correction or periods of high volatility?

Today, investors can invest in crypto-derivatives through the Chicago Board, and a few international funds offer instruments based on cryptocurrencies like Bitcoin, Ethereum, Litecoin, and ZCash. The rise of cryptocurrency( Bitcoin topped $15,000 in 2017)  and the growing acceptance of cryptocurrency by  US security regulators offers institutional investors an opportunity. They can  bet on rising ICOs and trends in older, highly liquid currencies. The test will come in the event of a market correction such as the type of upheaval that a trade war can cause. Today, more than any time in recent memory, cryptocurrency offers an alternative to investments that reflect global conditions.


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