Deutsche Bank: Investors Leave Wall Street for Crypto Due to Low Volatility

January 23, 2018

Deutsche Bank: Investors Leave Wall Street for Crypto Due to Low Volatility

Deutsche Bank analyst Masao Muraki and his colleagues Hiroshi Torii and Tao Xu posted a note to bank's customers, saying that they found a "growing correlation" between Bitcoin price and CBOE Volatility Index (VIX), also known as the "Fear Index" of Wall Street. Analysts emphasize that a lack of price volatility and fluctuations in the Wall street stock market forces investors to leave it and seek profit elsewhere. This is why they come to crypto markets, where is enough volatility and opportunities to earn. 

Due to the growing interest of institutional investors in more risky investments, such as cryptocurrency, Muraki writes that "correlation between Bitcoin and VIX has increased dramatically."

He continued: 

"Now, a growing number of institutional investors are watching cryptocurrencies as the frontier of risk-taking to evaluate the sustainability of asset prices."

As a result, institutional investors using fundamental and technical analysis can make more profit on cryptocurrencies than on more traditional assets.

Note's main idea is that as long as the level of volatility in the stock market is declining, prices of BTC and other popular cryptocurrencies will continue to grow, because investors will continue to turn to the cryptocurrency market for profit and they will bring more money there. 


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