The year 2022 should have put any of the bogus claims that cryptocurrencies provide diversification benefits or a hedge against inflation to rest. Yet somehow, crypto aficionados still think that the performance of the first half of 2022 was the exception that proves the rule. But there is a fundamental reason why diversification benefits broke down and are likely to break down again and again when markets are declining.
I find a lot of great insights in this newsletter, but I'll give this one a miss.
a) There is no evidence that in a bear market crypto assets are moving to bitcoin & co to stablecoins
b) Even if that was the case, the size of those stablecoins relative to US CP and treasuries is not meaningful, so it wouldn't impact the rates