CEO Hedgeye: Bitcoin remains the best hedge …
CEO Hedgeye: Bitcoin remains the best hedge against the depreciating dollar
The traditional finance industry is increasingly voicing the opinion that bitcoin can act as a defensive asset in the event of a collapse of the existing financial system. The last such statement was made by the CEO of the consulting company Hedgeye Risk Management.
While the issuance of traditional currencies is limited only by the central banks’ own considerations of proper monetary policy, the maximum supply of bitcoins will always be 21 million coins. Over time, the supply of new bitcoins is decreasing due to halving, the last of which took place in May 2020. Investors worried about dollar depreciation are paying attention to this aspect of cryptocurrency functioning.
“Bitcoin retains the best short-term macroeconomic correlation against the depreciating dollar,” writes Keith McCulloch, CEO of investment advisory and risk management firm Hedgeye..
In support of his words, he cites a table of correlations, according to which bitcoin over the past 15 days has shown the greatest deviation from the US dollar compared to the American stock index S&P 500, Brent Crude, Thomson Reuters / Jefferies Commodity Futures Index (CRB) and Gold.
Historical data also shows that Bitcoin tended to rally when the DXY, which shows the ratio of the US dollar to a basket of six major currencies (euro, yen, pound sterling, Canadian dollar, Swedish krona and Swiss franc), fell. At the same time, the recovery of the dollar after the 2008 crisis in 2014-2015 coincides in time with the decline in the bitcoin market..
The chart also shows that Bitcoin reached its maximum at the end of 2017, about $ 20,000, as the dollar weakened to a five-year low. Currently, the US currency shows a similar trend.
Curiously, shortly before the recent jump in the bitcoin rate, McCulough announced that he had sold all the cryptocurrency he had, citing the fact that his own risk assessment model prompted him to do so. Now the CEO of Hedgeye claims that he managed to buy back bitcoin, but did not publicly disclose it.
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