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What is the likely impact of the coronavirus on cryptos?


Lillian McKenna

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Most analysts were worried that the spread of the Chinese coronavirus would have a negative impact on cryptos, which are regarded as risky assets, but this was not the case. All the major cryptocurrencies including Bitcoin, Ethereum, and Ripple are up today despite the ongoing Chinese New Year holiday celebrations, and the coronavirus.

The recent performance by cryptos is evidence of their non-correlated nature given that global equity markets have tanked as the coronavirus spread to ten countries. The fact that cryptos are posting gains given the risk-off market sentiment is likely to boost their performance over the long-term as more investors allocate a portion of their portfolios to cryptos.

I'd be looking to get some exposure to cryptos as a hedge against such unpredictable events. You should allocate a small portion of your investment funds to cryptos, but given their volatile nature, I'd say no more than 5% of your portfolio.

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