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> Portfolio optimization. Crypto currencies are probably not perfectly correlated to other assets. So it stabilizes the portfolio to add some crypto. Consideri
by jeffreyrogers 8y ago
> Portfolio optimization. Crypto currencies are probably not perfectly correlated to other assets. So it stabilizes the portfolio to add some crypto.
Considering cryptocurrencies have only come to prominence during a bull market and unusual macroeconomic conditions I don't think you can conclude this. I would bet they're strongly correlated with the stock market. And because of lack of liquidity are likely to crash harder than other, more liquid assets.
- chrisco255 8y agoI would not make that bet at all. Why would there be any correlation between crypto and the stock market? Also, crypto is arguably more liquid than stocks. They trade 24/7, there's decentralized exchanges, ATMs for BTC, etc...can't take my company stock to an ATM machine. And cashing out stock often takes weeks.
- chrisco255 8y agoHey downvoters: OP made an unsubstantiated claim about correlation of stock markets and crypto markets. There is no reason to believe this to be true. Statements about 24/7 access to crypto markets is a fact. Statements about stock exchanges being limited to business hours are facts. What gives?