When Bitcoin Sneezes—How Crypto and Equities Caught the Same Cold
Professor Andrew Urquhart is Professor of Finance and Financial Technology and Head of the Department of Finance at Birmingham Business School (BBS).
This is the tenth installment of the Professor Coin column, in which I bring important insights from published academic literature on cryptocurrencies to the Decrypt readership. In this article, I discuss how crypto’s relationship with equities has evolved.
Not so long ago, Bitcoin was marketed as the ultimate diversifier—an asset supposedly immune to whatever was happening in equity markets. Early academic work backed that up: Liu and Tsyvinski (2021) showed that major cryptocurrencies had minimal exposure to standard stock, bond and FX risk factors, and that their returns…
