Bitcoin isn't much of a macro hedge
June 25, 2022
Bitcoin is often sold as protection against adverse macroeconomic outcomes. This column argues that this depiction as a macro hedge does not stand up to scrutiny. Recent events — from Covid and inflation to war — provide a window into what sort of asset bitcoin actually is. It if were a true macro hedge, bitcoin would be positively correlated with macroeconomic uncertainty. Instead, it acts as a leveraged bet for speculators. And unlike gold, which has been trusted as a macro hedge for millennia, bitcoin requires access to electricity and the internet, precarious services in times of turmoil.
Models and riskBloggs and appendices on artificial intelligence, financial crises, systemic risk, financial risk, models, regulations, financial policy, cryptocurrencies and related topics
© All rights reserved, Jon Danielsson,