Bitcoin Investor Dimitrios Koutmos Proves BTC Is Susceptible to Same Factors as Traditional Assets
According to the financial expert Dimitrios Koutmos, Bitcoin cannot work as a hedge asset. Cryptocurrency enthusiasts generally claim that Bitcoin is a digital currency that is not correlated to the traditional financial market. Nonetheless, Bitcoin seems to be susceptible to the same factors as traditional assets.
Bitcoin Is Susceptible to Different Factors as Traditional Assets
In order to arrive at such a conclusion, the expert compared treasury yield, equity indexes, and other data to Bitcoin’s price history. Apparently, there is a clear link between Bitcoin and these other indices. This is due to the fact that bitcoin’s price is influenced by short-term interest rates and stock market sentiment as well.
Interestingly, the more volatile Bitcoin performs, the better it works as a hedge asset. In general, these factors that affect traditional assets affected Bitcoin during times of low volatility. Nonetheless, this does not mean that Bitcoin didn’t perform well. Indeed, the virtual currency was the best performing asset of 2019.
Anthony Pompliano, the co-founder of Morgan Creek, explained that Bitcoin could be a good investment for companies because it has large growth potential for the future. At the same time, he said that this is a non-correlated asset and it should reduce the risk and increase the returns of a portfolio.
Additionally, Pompliano said that every single pension fund should purchase Bitcoin in order to have a balanced portfolio with large future growth potential.
At the time of writing this article, Bitcoin is being traded around $7,850 and it has a market capitalization of $139 billion, according to CoinMarketCap.