Market Cap: $2,637,897,880,020
24h Vol: $109,626,977,277
Cryptocurrencies: 29832
Markets: 112396
Cryptocurrencies: 29832
Markets: 112396
Market Cap: $2,637,897,880,020     
24h Vol: $109,626,977,277
Seeking Alpha 2021-02-15 07:07:29

Hedging Your Bets On Cryptocurrencies

Hedging Your Bets On Cryptocurrencies
What is the most effective proxy-hedging instrument for the Bitcoin/USD market? A recent study that tackles this question reaches no definitive conclusion, except the negative one that there is no way Bitcoin can be "fully hedged because the density forecasting capabilities of Altcoins are inadequate."Bitcoin is the matriarch of the Altcoins family, and all the family members share some common features, so one might expect that the other coins could be used to hedge positions taken in the mother of them all vis-a-vis the dollar or another of the sovereignty-backed currencies.The problem, though, is that Bitcoin's history shows "unusual volatility clustering effects" that are not among the econometric features of the other coins.
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