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Which cyclical vs defensive sectors are most closely correlated with the price movements of cryptocurrencies?

avatarRohit MandalDec 27, 2021 · 3 years ago1 answers

In the world of cryptocurrencies, there is a constant debate about which sectors are most closely correlated with their price movements. Specifically, which cyclical sectors, which are more sensitive to economic cycles, and which defensive sectors, which are less sensitive to economic cycles, have the strongest correlation with the price movements of cryptocurrencies? Are there any sectors that tend to move in tandem with the price of cryptocurrencies, and if so, why?

Which cyclical vs defensive sectors are most closely correlated with the price movements of cryptocurrencies?
Cryptocurrencies
Cyclical Sectors
Defensive Sectors

1 answers

  • avatarDec 27, 2021 · 3 years ago
    At BYDFi, we have observed that the technology sector is closely correlated with the price movements of cryptocurrencies. This is not surprising, considering that cryptocurrencies are built on blockchain technology and often rely on technological advancements for their growth and adoption. Additionally, the finance sector, especially fintech companies, also has a strong correlation with cryptocurrencies. As cryptocurrencies continue to disrupt traditional financial systems and offer new financial services, they attract investors who are also interested in the finance sector. However, it's important to note that correlation does not guarantee future performance, and investors should always conduct their own research and analysis before making any investment decisions.

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