Bitcoin, often touted as a digital gold or a hedge against inflation, may be more akin to a tech stock, according to a recent study by Standard Chartered. The analysis revealed a stronger correlation between Bitcoin's price fluctuations and the Nasdaq Composite index, a benchmark for technology stocks, than with the price of gold. This finding challenges the widely held belief that Bitcoin acts as a safe haven during times of economic instability.
Researchers at Standard Chartered examined historical price data and concluded that Bitcoin's performance mirrors that of high-growth technology companies. This suggests that Bitcoin investors are more likely reacting to factors influencing the tech sector, such as interest rate changes and technological advancements, rather than macroeconomic events that typically drive gold prices.
The study recommends that investors adjust their perception of Bitcoin and treat it as a volatile technology stock within their portfolios. This approach could lead to more informed investment decisions and improved risk management strategies. Experts advise conducting thorough research and diversifying portfolios to mitigate potential losses associated with Bitcoin's price volatility. The findings underscore the importance of understanding the underlying drivers of Bitcoin's price and avoiding assumptions based solely on its reputation as a digital gold.
Study: Bitcoin Behaves More Like a Tech Stock Than a Safe Haven
A new study from Standard Chartered suggests that Bitcoin's price movements are more closely tied to the Nasdaq stock index than to traditional safe-haven assets like gold. This challenges the narrative of Bitcoin as a reliable hedge against market uncertainty. The research indicates that investors may find it more beneficial to consider Bitcoin as a high-growth technology stock. Understanding this correlation is crucial for managing risk in investment portfolios.
Source: Read the original article at NBC