Goldman Sachs: Bitcoin, Altcoins and Traditional Finance Gradually Increased Correlation

Goldman Sachs said in a report that the recent pullback in the cryptocurrency market suggests that its integration into the mainstream could be a “double-edged sword,” Goldman Finance reported. The total market capitalization of cryptocurrencies has fallen by about 40% since November. This round of decline is mainly driven by macroeconomic factors. The adoption of mainstream investment institutions can increase its valuation, but it is also increasing its correlation with traditional financial market variables, which further reduces the diversification of holding digital assets. Advantage. Goldman Sachs also noted that the sharp drop in token prices has led to a drop in liquidation and borrowing on decentralized finance (DeFi) platforms, much like the traditional financial system. But developments in the Metaverse realm may provide some digital assets with a “long-term boost” over time, but they will not be “immune from macroeconomic forces” such as monetary tightening by central banks. (21jingji)