Is There a Bitcoin–Macro Disconnect?
Abstract: Cryptocurrencies’ market capitalization has grown rapidly in recent years. This blog post analyzes the role of macro factors as possible drivers of cryptocurrency prices. We take a high-frequency perspective, and we focus on Bitcoin since its market capitalization dwarfs that of all other cryptocurrencies combined. The key finding is that, unlike other asset classes, Bitcoin has not responded significantly to U.S. macro and monetary policy news. This disconnect is puzzling, as unexpected changes in discount rates should, in principle, affect the price of Bitcoin.
Keywords: cryptocurrency; Bitcoin; macro news; bubbles;
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Provider: Federal Reserve Bank of New York
Part of Series: Liberty Street Economics
Publication Date: 2023-02-08