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For some time now DAI has been backed by a basket of coins precisely to mitigate the risk of one coin dropping.
by Stevvo 5y ago
For some time now DAI has been backed by a basket of coins precisely to mitigate the risk of one coin dropping.
- AlexandrB 5y agoBut many coins seem to move in concert (just based on casual observation). Additionally diversifying in traditional equities has the benefit of being exposed to multiple industries - lets say farms and chip manufacturers - that don't depend on the same commodities as inputs and don't sell products into the same markets. Crypto doesn't have this property - besides requiring an input of energy, they're not involved in any kind of production at all. So what does diversifying even mean for that kind of asset? In a recession, why would there be any reason to think that ETH would behave differently than BTC?