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Bitcoin Rundown: Market Indecision, Legacy Correlations, And a Lightning Boost

Jul 14, 2021 · 4 min read

By Ashwath Balakrishnan, Jeremy Ong, and Kevin Kelly, CFA

Market Update

Crypto assets did not take well to yesterday’s inflation data. After a trip towards the range low, BTC and ETH are finally finding a semblance of strength. Other crypto assets have continued to take a beating into today’s session.

Bitcoin’s Legacy Correlations

Bitcoin is often touted as an uncorrelated asset relative to conventional asset classes like equities, bonds, etc. Over the long-term, this holds true, but in the short-to-medium term, correlations tend to fluctuate depending on market conditions and general risk appetite. Despite its “digital gold” narrative, the correlation between BTC and physical gold also tends to ebb and flow. Over the last year, we’ve seen the correlation between the two slide, which naturally prompted some market pundits to question the validity of said narrative. Putting short-term correlations aside, our long-term thesis of broad-based fiat currency debasement will serve as a long-term tail

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