"And despite some in the crypto sector who may be holding onto the long-told thesis that Bitcoin resembles "digital gold" and holds some sort of store of value argument, I'd say that thesis really has been blown in recent years. If anything, Bitcoin's correlation to other higher-risk equities is sky-high. This is a digital asset I've heard others call a mega-cap tech stock on steroids, providing essentially a much higher beta option for those looking to bet on continued positive sentiment within the riskiest grouping of assets in the market."
"The reality is that cryptocurrencies, in a similar fashion to alternative assets such as collectibles, wine, or fine art, are valued on the basis (generally speaking) of what a given investor thinks another investor will pay for said asset at some time frame down the road. All these alternative assets have climbed in recent years. I think that's mostly a function of the fact that asset prices have seen broad-based rises,"
Bitcoin has demonstrated very high correlation with higher-risk equities, behaving more like a high-beta, mega-cap tech stock than a traditional store-of-value asset. The asset can amplify upside for investors seeking exposure during risk-on rallies, though uncertainty from monetary, fiscal, and trade policy could cause near-term pain. Cryptocurrencies are often valued similarly to alternative assets such as collectibles, wine, or fine art, with price expectations driven by what future buyers will pay. Broad-based asset price increases have enabled wealthier investors to allocate more capital to speculative assets often viewed as hedges. Fundamentals still influence investor outlook.
Read at 24/7 Wall St.
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