Cryptocurrencies are increasingly correlated with the CBOE Volatility Index, better known as Wall Street’s “Fear Index.”
That’s according to a note from global financial strategist Masao Muraki and his team at Deutsche Bank.
The correlation relates to the fact that a low volatility environment encourages investors to move into riskier assets, like cryptocurrencies, to achieve decent returns on their investments.
LONDON – There’s a growing relationship between the price of bitcoin and the VIX, the volatility index colloquially known as Wall Street’s “Fear Index,” according to analysts at Deutsche Bank.
Writing in a note circulated to clients on Friday, Deutsche Bank global financial strategist Masao Muraki, alongside his colleagues Hiroshi Torii and Tao Xu, said that in the three weeks of 2018 so far “correlation between Bitcoin and VIX has increased dramatically.”
Right now, market volatility is close to record lows, as measured by the CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility. Simply put, markets are pretty dull, with little to no major fluctuations going on. Stocks simply keep rising.
That, in turn, is leading investors to look for more and more risky ways of making money, which Deutsche Bank believes is part of the reason for the …read more
Source:: Businessinsider – Technology