Crypto’s contagious effect on equities

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Before the pandemic, the crypto world seemed isolated from the financial markets. Bitcoin and other crypto instruments showed little correlation with equity market performance. Cryptocurrencies were even regarded as helpful in diversifying risk and as a hedge against swings in other asset classes. However, since the Covid-19 crisis, the correlation between crypto and equity market movements has increased sharply, meaning that the financial sector may not be insulated from future crypto boom-bust cycles.

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