I guess this may make sense, as crypto buyers may just be speculating on its price movement in isolation and not actually investing in it because of the behavior of other assets. In fact, I couldn’t find any asset to which BTC has had any semblance of positive correlation if you know of one, let me know. bonds, gold, silver, copper, palladium, and broad commodities! That’s pretty wild. Looking at 3-year rolling returns for the decade ending 2020, BTC has had a correlation of zero to U.S. “Uncorrelated” means assets don’t move the same way at the same time. I think crypto is mostly just a speculative asset, but it may indeed offer a diversification benefit in terms of being uncorrelated to other assets.
Similarly, cryptocurrency ETFs are not blockchain ETFs, and vice versa. Note, however, that blockchain is not cryptocurrency, and cryptocurrency is not blockchain. Decentralization is a central driving theme of cryptocurrencies, meaning the digital currency does not rely on physical banks and government control, for better or for worse. Cryptocurrency is just digital money that takes the form of “coins” on that ledger.
The SEC cites worries of volatility, illiquidity, and potential for manipulation.Ĭryptocurrency sits upon the underlying blockchain technology, a peer-to-peer network of participants establishing a decentralized ledger. The SEC has been more stringent so far in not approving a US-based Bitcoin ETF they have rejected the proposals they’ve received thus far.
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