Here's My Top Cryptocurrency to Buy in February
It has been a difficult past few months for cryptocurrencies, as most of the major names have plunged from November highs. The crypto market as a whole has gone from about $3 trillion to its current level of roughly $1.7 trillion.
This largely mirrors the drop that growth stocks have experienced over this period, and it shows that crypto isn't a hedge against inflation, as Goldman Sachs analysts pointed out in a recent research note. "Mainstream adoption can be a double-edged sword: while it can raise valuations, it will also likely raise correlations with other financial market variables, reducing the diversification benefit of holding the asset class," the Goldman Sachs analysts wrote.
It also hasn't helped that federal regulators have been keeping a closer eye on cryptocurrencies. News outlets reported in late January that the Biden Administration will issue an executive order that charges federal agencies with assessing the risks and opportunities of crypto. This has not been officially announced by the White House yet, but news reports say it's likely coming this month. Also, the Federal Reserve recently released a discussion paper that analyzes the pros and cons of a potential U.S. central bank digital currency. What this all means we don't know yet, but these developments obviously bear watching.
Source Fool.com
