- “the fall in the shares of low-margin technology firms and companies that have recently gone public with IPOs.”
- The massive adoption of cryptocurrencies could boost valuations and likely correlations with other financial market variables.
- . The specialists drew attention to the positive correlation of bitcoin with inflation risk indicators and the innovative technology sector.
Digital assets are not protected from the impact of macroeconomic factors such as monetary tightening. CoinDesk writes about this, citing a Goldman Sachs report. The current pullback in the cryptocurrency market says that mainstream adoption could be a “double-edged sword.”
The decline in quotes was mainly due to reasons not related to digital assets, analysts noted. Experts associated it with “the fall in the shares of low-margin technology firms and companies that have recently gone public with IPOs.” This segment of the stock market turned out to be the most sensitive to the signals of the upcoming increase in the Fed ‘s key rate.
The massive adoption of cryptocurrencies could boost valuations and likely correlations with other financial market variables. This reduces their diversification advantage. The specialists drew attention to the positive correlation of bitcoin with inflation risk indicators and the innovative technology sector. At the same time, they found a negative price relationship with real interest rates and the value of the US dollar. Further development of blockchain technology, in particular in the form of metaverses, may eventually provide a “tailwind” for certain digital assets. At the same time, they will not be “immune to macroeconomic forces,” experts warned.
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Recall that the correlation between the first cryptocurrency and the shares of companies in the US technology sector has updated an all-time high, according to Bloomberg. In January , the IMF warned of the risks of “contamination” of the stock and bitcoin markets.
what is bitcoin cryptocurrency?
- The word bitcoin was defined in a white paper published on 31 October 2008.
- The cryptocurrency was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto.
- Bitcoins are created as a reward for a process known as mining.
- Some investors and economists have characterized it as a speculative bubble at various times.
Bitcoin is a decentralized digital currency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. The cryptocurrency was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto. The currency began use in 2009 when its implementation was released as open-source software.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. Bitcoin has been criticized for its use in illegal transactions, the large amount of electricity (and thus carbon footprint) used by mining, price volatility, and thefts from exchanges. Some investors and economists have characterized it as a speculative bubble at various times. Others have used it as an investment, although several regulatory agencies have issued investor alerts about bitcoin.In September 2021, El Salvador officially adopted Bitcoin as legal tender, in the face of internal and international criticism, becoming the first nation to do so.
The word bitcoin was defined in a white paper published on 31 October 2008. It is a compound of the words bit and coin.No uniform convention for bitcoin capitalization exists; some sources use Bitcoin, capitalized, to refer to the technology and network and bitcoin, lowercase, for the unit of account. The Wall Street Journal, The Chronicle of Higher Education,[19] and the Oxford English Dictionary advocate the use of lowercase bitcoin in all cases.
source: wikipedia
