To diversify crypto risk using correlation analysis, select assets with low or negative correlations (e.g., BTC vs. XRP or ETH vs. ADA). Use a 30-90 day correlation coefficient (below 0.5 is ideal). Allocate 50-70% to BTC/ETH for stability, then spread 30-50% across uncorrelated altcoins. Rebalance monthly to adapt to shifting correlations.
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Layer 2 tokens like ARB, OP, and MATIC show strong collective performance in 2025, with TVL surging to billions, TPS exceeding 65k, and ecosystems expanding via DeFi, NFTs, and gaming. This signals genuine prosperity from scalability and adoption, though rapid gains (e.g., 68% corrections) hint at bubble risks amid hype. Overall, growth outweighs froth.
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Rising global inflation expectations often boost crypto prices, as investors seek hedges like Bitcoin, dubbed "digital gold." Data from 2021-2023 shows BTC surged during high inflation periods (e.g., 19% rise when U.S. CPI hit 9.1% in June 2022). However, volatility persists—sharp rate hikes or economic uncertainty can trigger sell-offs, as seen in 2022’s crypto crash.
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