Cryptocurrency exchange Binance recently released a research report that looked at Bitcoin’s limited correlation with other asset classes and its significantly high volatility.
Bitcoin has recorded soaring volatility over the past ten years, especially in 2017, when the price of Bitcoin hit an all-time high of $20,000 from a low of $700, indicating a rate of return of about 27,000% in just 12 months. Such instances that indicated the volatility of the coin have allowed people to brand the coin as a highly unstable and risky investment.
However, the research suggested that the price volatility of the coin has been subsiding from the time of the genesis block.
Additionally, a correlation analysis, which indicates a statistical measurement between multiple assets aiming to study their relationship, was also conducted. According to the analysis, Bitcoin exhibited a low correlation with other asset classes like gold, silver, oil, etc.
The price changes of various assets along with Bitcoin at different time spans was also disclosed in the research. The first chart indicated a “three-year weekly return correlations among asset classes”,
The second chart illustrated the “one-year weekly return correlations among asset classes”,
Neither of the charts exhibited any sort of notable correlation between Bitcoin and the other assets as the “median correlation coefficient” was below 0.10 with other asset classes.
Bitcoin’s negative correlation with non-crypto asset classes further reveals that it can be used as a hedge against each other due to the movement of the asset in different directions.
If reproduced, please indicate the source: https://www.uucj.net/bitcoins-low-correlation-with-other-asset-classes-aids-as-a-portfolio-hedge/
Phemex is an professional-grade Bitcoin derivatives exchange featuring Bitcoin Perpetual futures with up to 100x account leverage. The exchange is built by ex-Morgan Stanley executives, aiming at providing institutional-grade trading tools and security. Derivatives trading allow traders to increase their exposure to certain assets. Key Features of Phemex Ability to Leverage up to 100X margin Institutional grade trading and security Robust trading insurance Free deposit fees Bitcoin Perpetual Futures The core trading product offered by Phemex is cryptocurrency derivatives trading such as Bitcoin Perpetual Futures. Derivatives are financial tools that derive value from the underlying product – in this case cryptocurrencies such as Bitcoin. Phemexexchange trades contracts based on the underlying asset instead of the asset themselves – this allows higher leverage and more types of products. Phemexallows up to a 101X max leverage on derivative products. This means a 1% change in the price of Bitcoin could result in 100% change in the funding amount – potentially allowing traders to double or nothing on the exchange. This type of leverage is popularized by the BitMEX exchange which also allows 100X leverage. Phemex Trading Fees The…Apr 19, 2020
The Dubai Chamber of Commerce and Industry (DCCI) has signed a memorandum of understanding (MoU) with Emirates NBD. Middle Eastern news daily Saudi Gazette reported on Oct. 14 that the DCCI, which acts as an international business hub in Dubai, has signed an MoU with Dubai government-owned bank, Emirates NBD. The bank, which is one of the largest banking groups in the Middle East in terms of assets, will provide trade finance solutions for the Digital Silk Road, a Dubai 10X initiative, which uses blockchain technology to digitize trade processes in Dubai. Dubai 10X is a program wherein various departments of government are tasked with researching and applying new and disruptive technologies to their administration and operations. Hamad Buamim, president and CEO of DCCI, reportedly said that the agreement with Emirates NBD is a major step forward for the initiative, adding: “Trade finance remains one of the most important tools used today to facilitate international trade and commerce as it simplifies transactions for importers and exporters.” The DCCI had signed an MoU at the beginning of July with the International…Oct 15, 2019
The largest data center in the former Soviet Union, BitRiver, opened about a year ago in the Siberian city of Bratsk and most of its clients use the facility to mine Bitcoin (BTC), Bloomberg reported on Nov. 24. The data center allows cryptocurrency miners to take advantage of cheap energy in what once used to be the world’s largest aluminum smelter. The plant was built by the USSR in the 1960s with the still-active hydropower plant to power its operations. Cold climate, cheap energy The data center’s location also benefits from a cold climate, allowing mining hardware to work at higher efficiency rates while cutting cooling costs. Billionaire and president of the world’s second-largest aluminum company Rusal, Oleg Deripaska, is Bitriver’s biggest shareholder. He reportedly had the idea of building the data center about five years ago and directed his company Rusal alongside aluminum and power producer En+ to repurpose the facilities. According to Bloomberg, Russian law does not recognize cryptocurrency mining. Because of this legal gray area, Bitriver does not directly engage in mining, but only provides equipment and…Nov 24, 2019
Technology companies have a big role to play to find a cure for the novel coronavirus. The White House is officially asking for help from Silicon Valley to address this major situation accordingly. The White House is genuinely – and rightfully – concerned about the novel coronavirus. White House Shows a Proactive Approach Finding a solution to deal with this situation will not be easy by any means. Rather than going at it alone, different industries will need to join forces as soon as possible. To ensure that is the case, Silicon Valley will need to offer a helping hand. Amazon, Google, and others have been tapped by the White House already. By joining forces, the goal is to augment the government’s efforts to track the pandemic. Additionally, technology can be used to share accurate information and assist Americans unable to go to work or attend school. What will come of this request for collaboration, remains to be determined. Now is a good time to leverage the power all of these technology firms hold today. An all-hands-on-deck effort is direly…Mar 16, 2020
The G20 is setting rules to regulate stablecoins such as Facebook’s Libra cryptocurrency. Responding to a call by the G20, the Financial Stability Board (FSB) has provided 10 “high-level” recommendations that establish a regulatory framework for stablecoins. Also read: IMF Declares Global Recession, 80 Countries Request Help, Trillions of Dollars Needed G20 Sets International Rules for Stablecoins The G20 finance ministers and central bank governors will meet under Saudi Arabia’s G20 presidency on Wednesday to “discuss and take urgent actions needed to address the global challenge presented by the covid-19 pandemic,” host country Saudi Arabia announced. The April G20 finance chiefs’ meeting is traditionally held in Washington, D.C., but due to the coronavirus outbreak worldwide, G20 meetings are currently held virtually, and more frequently. Ahead of the meeting, the Financial Stability Board (FSB) published 10 “high-level” recommendations on Tuesday that “addressed to authorities at jurisdictional level to advance consistent and effective regulation and supervision” of global stablecoins. The G20 regulatory watchdog explained: The recommendations respond to a call by the G20 to examine regulatory issues raised by ‘global stablecoin’ arrangements…Apr 15, 2020
Football is probably the most beloved sport in the world, and, as expected, huge sporting events such as Euro 2020 are bound to attract millions of fans to watch their favorite teams compete against each other. And besides watching football games, many fans like to take it a step further and bet on the outcome. Sports betting has been a favorite activity of sports enthusiasts for quite some time now. And now, the development of the crypto industry over the past few years has made it easier for people to place safer and more discreet bets on sporting events. In addition, the increasing public interest in blockchain technology made it possible for fans to purchase game tickets, book hotels, flights, and pay for several other services using cryptocurrency. Crypto Betting at Euro 2020 The UEFA European Football Championship, or just Euro 2020, is the quadrennial international men’s football championship of Europe. The event will be held in 12 major cities across the continent and is set to bring the best names and teams in football. This will undoubtedly result in…Mar 3, 2020
J. Christopher Giancarlo is Senior Counsel at Willkie, Farr & Gallagher and former Chairman of the US Commodity Futures Trading Commission. As you read this, the United States along with the rest of the world has been struck with the COVID-19 pandemic. As Washington has implemented the policy response of social distancing with the resulting braking of the economy, it has set upon issuance of direct payments to individuals to offset lost wage income. To better effectuate direct assistance, proposals have been made for so-called “digital dollar” electronic cash payment infrastructures to distribute electronic payments directly to consumers. These proposals to date consider “digital dollars” in terms of distribution functionality for government benefits, not as a form of true central bank digital currency (CBDC). The Digital Dollar Project proposes something far more fundamental: a new, additional format for U.S. currency, a digital dollar that has the same legal status as the dollars in one’s purse, only on a personal device. For government agencies charged to distribute government crisis benefits to vulnerable populations, especially those without access to banking services, direct transmission of…Apr 16, 2020
After naming Kristina Littman as Chief of the Division of Enforcement’s Cyber Unit in December, the United States Securities and Exchange Commission has introduced more fresh blood to its ranks. On Feb. 13, Nancy Sumption was announced as the successor to Kevin Zerrusen, the former Senior Advisor for Cybersecurity Policy to Chairman Jay Clayton. Nancy Sumption has worked in cybersecurity and privacy in healthcare and finance in addition to her two decades of public service as an officer and staff judge advocate in the U.S. Air Force, the U.S. intelligence community, and the Department of Justice. In an SEC press release, Ms. Sumption stated: “I look forward to working with [Chairman Clayton], the SEC staff, fellow regulators, and industry to deepen our partnerships to enhance operational resiliency and manage cyber risks.” What Nancy Sumption’s Appointment Means for SEC Policy Ms. Sumption is not the only recent addition working in the U.S. government to better improve their understanding of crypto security. Andrew Ridenour was named as a senior counsel to the chairman Heath Tarbert, at the Commodity Futures Trading Commission (CFTC)…Feb 14, 2020
According to the new report released this week the CEO of Bakkt, Mike Blandina has stepped down from his position at the platform. After replacing Kelly Loeffler, Blandina served as the CEO for the digital assets platform for just four months. According to the new report released this week the CEO of Bakkt, Mike Blandina has stepped down from his position at the platform. After replacing Kelly Loeffler, Blandina served as the CEO for the digital assets platform for just four months. In his stead, David Clifton has been appointed to the interim CEO of the company following Mike’s resignation. The press release was released early this week on the 23rd of April but does not specify why Blandina left the company aside from noting that he did want to pursue a new opportunity. Some of the rumours circulating the industry suggest that Mike will be moving to the investment bank giant JP Morgan Chase. For those that don’t know he became the CEO of the company in December last year after Loeffler was appointed by Brian Kemp to the…Apr 24, 2020
Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and cryptocurrency exchanges, announced that its proprietary M5 exchange platform will now allow for crypto-asset brokerages to offer margin trading and lending. Modulus Technology Leverage tools allow traders to more flexibility hedge positions without fully capitalizing on the endeavor. The technology which makes this feasible is the all-new Modulus de-leveraging engine and an extension of Modulus’ Market Surveillance & Risk Management Solution. The Modulus surveillance/risk solution uses deep insights to guard against malfeasance within markets and between market participants. It provides trade surveillance and pre-trade, at-trade, and on-trade risk management, along with customizable alerts and reports identifying market manipulation, abusive trading behavior, and money laundering. “The Modulus futures and margin exchange solution will provide exchanges the ability to offer customizable lending and leverage options. Our clients will be able to self-regulate the process from start to finish. We support customization in terms of lending, maximum leverage, and de-leveraging, while also offering position management via our powerful risk management & de-leveraging engine. In essence, this will…Nov 14, 2019