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Digital gold or fool’s gold: Crypto as a hedge for equity risk

Correlation data raises questions on Bitcoin’s ability to serve as a hedge

Crypto enthusiasts often claim that digital coins and tokens are uncorrelated with equities and can provide a safe haven amid stock market crashes. The assumption is that crypto assets will act like so-called digital gold, serving as a hedge against equity risk, and help investors ride out such downturns.

Such bold claims beg for examination, especially amid what looks like a bear market for stocks. So, we explored how crypto has performed during previous crashes. In particular, we isolated the major...

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