Bloomberg Intelligence Says Crypto Faces a 'Catch-22' on Tight Correlation With Stocks
JH Kim
Summary
- Bloomberg Intelligence said the cryptocurrency market could be vulnerable because of its high correlation with the stock market and greater volatility.
- Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said the cryptocurrency market is in what he called a "Catch-22."
- He said cryptocurrencies could post deeper losses if stocks fall, while high volatility could remain a burden even when equities rise.
Forecast Trend Report by Period
The cryptocurrency market may be vulnerable regardless of the direction of stocks because it is highly correlated with equities while also being more volatile, according to Bloomberg Intelligence.
On September 20, Mike McGlone, Bloomberg Intelligence's senior commodity strategist, said the crypto market was in what he described as a "Catch-22."
He cited crypto's strong correlation with stocks, along with its greater volatility, as a key risk.
As a result, cryptocurrencies could suffer steeper losses if equities fall. Even if stocks rise, high volatility could still weigh on the market.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.