Following the collapse of Alameda and FTX, crypto's correlations to legacy markets have completely come off.
As an asset class, this is the most independent crypto has traded for over a year. For most asset allocators and traders, this is generally favorable because it increases the number of uncorrelated assets to profit from.
A big problem for crypto traders is they've been merely riding on a short volatility vehicle that's been tightly correlated to long-duration growth stocks.
All crypto has offered in this period is Beta rather than a unique directional market.
So it's certainly been nice to see some dislocation from equity markets -- even if crypto's been lagging hard following the FTX fiasco.
But my bet is this correlation between stocks and crypto will more than likely return in the coming weeks and prove a durable feature of the landscape.
You might not like it, but we must always deal with reality whenever money's on the table.
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