Crypto to decouple soon from stock prices? Pantera CEO explains the ‘correlation’ picture

ambcrypto.com:

As fears of the Federal Reserve’s hawkish stance on inflation intensify, the rising correlation between stock and cryptocurrency prices has also emerged as a worrying trend. However, the CEO and founder of blockchain investment firm Pantera Capital,  Dan Morehead, believes crypto continues to remain an efficient store of wealth, especially in the face of interest rate hikes plummeting stocks.

Source: Twitter/Ecoinometrics

In a report titled ‘The Next Mega-Trade’, the CEO opined that digital assets will be the ‘best place’ to park your fund in the coming time, as the Fed’s next move to combat rising inflation has left most investors on the edge of their seats. He added that the correlation of crypto with bonds, stocks, and real estate will soon go down as they face the wrath of the Fed’s ‘massive policy U-turn.’

“I think our markets will decouple soon. Investors are going to think: bonds are going to get crushed as the Fed goes from the only buyer on Earth to seller. Rising rates will make equities and real estate less attractive… Blockchain is a very legit place to invest in that world.”

Reiterating the points made in a previous call with investors, Morehead said that store of wealth assets such as gold and crypto don’t respond to the Fed’s rate hikes in the manner that other assets such as bonds do, adding,

“Whereas blockchain isn’t a cashflow oriented thing. It’s like gold. It can behave in a very different way from interest-rate-oriented products. I think when all’s said and done, investors will be given a choice: they have to invest in something, and if rates are rising, blockchain is going to be the most relatively attractive.”

While he admitted that cryptocurrencies have been a hit with the Federal rate hikes, Morehead