Morgan Creek Capital Management’s Mark Yusko is naming four crypto assets that he believes could withstand a market downturn relatively well.
According to a Business Insider report, Yusko says that the native tokens of smart contract-enabled blockchains Solana (SOL), Avalanche (AVAX), Cosmos (ATOM) and Polkadot (DOT) are among the crypto assets capable of surviving a bear market.
In the case of Solana, the Morgan Creek founder says that the seventh-largest blockchain by market cap is a “great protocol.”
“There’s probably still some potential volatility in the price ahead. But long term, I think it’s a great protocol.”
According to Yusko, cryptocurrencies will be in a bear market for the next 12 months or so before the next Bitcoin halving event kicks off a bull cycle.
“What you’re seeing is crypto is definitely in a bear cycle. It’s going to struggle for the next 12-ish months then we’ll go back to the next bull cycle triggered by the next halving event.”
The last Bitcoin (BTC) halving event occurred in May of 2020. The next one is expected to take place during the first six months of 2024.
Yusko also says that Bitcoin is not correlated to stocks though it might appear to be so on shorter time frames. For instance, Bitcoin is down 7.77% year-to-date compared to the tech-heavy Nasdaq which has fallen 9.89% year-to-date in the wake of the Federal Reserve’s intentions to hike rates.
“You can’t calculate correlation over the short-term. Just the math doesn’t work. And so yes, it is true that in times of stress, ‘all correlations go to one.’
Zoom out, the correlation of Bitcoin to equities is 0.15 for long periods of time. Some weeks, some months, it goes higher, but over the long term, it’s still 0.15 and to bonds, it’s 0.”
Correlation can take a value of between -1 and 1. The higher the value, the stronger the correlation, and the lower the value, the weaker the correlation.
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