Reading time: ~2 m
Specialists of the business school of the British Durham University believe that the monetary decisions of world regulators have little effect on the cryptocurrency market, with the exception of the US Federal Reserve.
The results of a study by scientists at Durham University suggest that the side effects of changing monetary policy have a low impact on the cryptocurrency market. Experts came to the conclusion that the relationship between the profitability of cryptocurrencies and the secondary effects of monetary policy was especially high when the level of interaction between monetary regulators of the Eurozone countries, Japan, the UK and the United States decreased. The authors of the study argue that the pressure on the market has decreased throughout the process of changing the policy of the US Federal Reserve System (FRS), and intensified recently when volatility returned to the cryptocurrency market.
According to the results of the study, there is a strong correlation between the profitability of Bitcoin, Litecoin and Ripple. Scientists argue that the monetary and political decisions of countries with the largest economies in the world and the profitability of the cryptocurrency are practically unrelated. At the same time, the tightening of the Fed’s monetary policy reduces profits from crypto assets.
According to experts of the British university, in conditions of low interest rates, investors prefer only profitable projects. But once lending rates rise, investors begin to diversify their portfolios. Ahmed H. Elsayed, a professor at Durham University Business School, noted that since the financial crisis, central banks in developed and emerging markets have adopted a number of unconventional monetary solutions:
“Our study shows that the side effects of monetary policy changes do not affect the volatility of cryptocurrencies.”
At the same time, Bloomberg Intelligence analysts do not agree with British researchers, who argue that the change in global monetary policy negatively affects the cryptocurrency market.
#Tightening #Feds #policy #reduces #profits #crypto #assets