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Tag: market participants

  • Diversifying Crypto Portfolios with XRP and SOL

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    In the world of digital assets investing, XRP and Solana (SOL) are the third and sixth largest cryptocurrencies by market capitalization after bitcoin and ether.1 Market participants with existing exposure to bitcoin and ether can look to XRP and Solana to diversify their return sources and manage risk.

    Traditional diversification principles apply to crypto investing, in which less correlated assets can cushion the portfolio from adverse price movements. The correlation matrix among the four assets highlights that XRP, in particular, has fairly low correlations to bitcoin, ether and SOL.

     

    XRP

    SOL

    ETH

    BTC

    XRP

    1.0000

     

     

     

    SOL

    0.5506

    1.0000

     

     

    ETH

    0.5665

    0.6780

    1.0000

     

    BTC

    0.5525

    0.7522

    0.7620

    1.0000

    Source: Correlation based on daily logarithmic returns from CF Benchmarks Rate publications from Jan. 2, 2024 through September 12, 2025.

    Risk and returns tend to be linear among the four coins, with higher returns accompanied by higher volatility. XRP and SOL generally offer higher potential returns but come with higher volatility compared to BTC and ETH. BTC appears to be the most stable option, while ETH strikes a balance between risk and return.

    In particular:

    • XRP has the highest average daily return (0.52%) among the four cryptocurrencies. Correspondingly, it exhibits higher standard deviation (5.89%) than BTC, ETH and SOL.

    • SOL has the second highest standard deviation of daily returns (5.13%), suggesting it is one of the most volatile assets of the group. Its mean daily return (0.32%) is higher than ETH and BTC, but lower than XRP.

    • ETH has a moderate mean daily return (0.24%) and a lower standard deviation of daily returns (4.10%) compared to XRP and SOL, indicating a more slightly stable profile.

    • BTC has the lowest standard deviation of daily returns (2.91%), making it the least volatile asset in this comparison. Correspondingly, BTC (0.27%) has the lowest daily average returns among the four.

    Cryptocurrency

    Average Daily Return

    Standard Deviation of Daily Returns (Volatility)

    Risk/Reward Ratio

    XRP

    0.52%

    5.89%

    0.088

    SOL

    0.32%

    5.14%

    0.062

    ETH

    0.24%

    4.10%

    0.058

    BTC

    0.27%

    2.91%

    0.092

    Source:  CME Group.  Data from Jan. 2, 2024 – Sept. 12, 2025

    Source: CME Group. Data from Jan. 2, 2024 – Sept. 12, 2025

    For market participants with existing exposure to bitcoin and ether, these new futures offer an effective means to diversify returns and manage risk.  To meet the market’s needs for additional coin exposures, CME Group launched large-sized futures and smaller-sized Micro futures on SOL and XRP in March and May 2025, respectively, to complement the existing Bitcoin futures and Ether futures product suite.

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  • The brutal rout in stocks this month was a ‘dress rehearsal’ for what’s to come, JPMorgan says

    The brutal rout in stocks this month was a ‘dress rehearsal’ for what’s to come, JPMorgan says

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    Analysts said concerns over economic growth will likely be the biggest factor leading up to another sell-off.iStock; Rebecca Zisser/BI

    • Last week’s market sell-off was potentially just a taste of what’s to come, JPMorgan says.

    • Growth concerns will likely be the next big trigger, analysts said.

    • The market this week is back in the Goldilocks zone after a handful of encouraging data points.

    The abrupt sell-off that sparked the stock market’s worst loss in two years might have been a preview of what’s to come, according to JPMorgan.

    Analysts at the bank said the combined worries of decelerating economic growth and the carry trade unwind were too much for the market to handle at once.

    Since then, though, the stock market has clawed back all of its losses and found itself basking in the glow of positive economic updates this week, leading many on Wall Street to conclude the event was an overreaction to a momentary blip in the data.

    “Many market participants are dismissing the recent blowup of various crowded trades as a fluke or flash crash, but we see it as more of a dress rehearsal for what’s to come,” JPMorgan analysts said in a Thursday note.

    The sell-off this month came as US unemployment jumped, and accelerated as the Japanese market sank 12.4% in its biggest fall since “Black Monday” in 1987. An unwind of the so-called yen carry emerged as the big culprit rocking global equities.

    Investors had borrowed yen at low rates in Japan for the last two years, leaving them flailing and rushing to sell to meet margin calls after the Bank of Japan’s surprise rate hike.

    While massive, the analysts predict that carry trade concerns won’t be the trigger of future volatility, as many investors aren’t likely to rush back into the strategy after getting caught off-guard this month.

    “The carry trades could eventually become a problem again, but with investors getting burned, not everyone will be reinstating these trades, so it ought to be more difficult to hit the old highs,” the analysts said.

    “Instead, we see the reemergence growth risk as the likely trigger,” they added.

    Read the original article on Business Insider

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  • Asia Stocks Stage Relief Rally, Earnings in Focus: Markets Wrap

    Asia Stocks Stage Relief Rally, Earnings in Focus: Markets Wrap

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    (Bloomberg) — Asian stocks advanced, as the focus shifted from Middle East tensions to company earnings and economic data for insight into the direction of central bank policy.

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    Benchmarks across the region recouped some of last week’s slide as traders took comfort in the absence of further escalation from Iran following Israel’s retaliatory strike. Hong Kong rallied more than 2%, with measures from Chinese authorities to bolster the city’s status as a financial hub giving an added boost.

    Demand for safe havens eased, after traders last week were whipsawed by Middle East tensions as well as hawkish comments from Federal Reserve officials indicating reluctance to cut rates anytime soon. Oil and gold both fell. The dollar was weaker while the yield on 10-year US Treasury yields advanced.

    “We are seeing a relief rally underway this morning as geopolitical risks subside,” said Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “The move basically squares the ledger now and allows the markets to go back to focus on macroeconomic and corporate fundamentals.”

    Contracts for US equities edged higher after the S&P 500 recorded its worst week since March 2023. Asian chip stocks also slumped after Nvidia tumbled 10% on Friday, the most in four years.

    Investors are recalibrating their positions after stronger-than-expected US data forced the Fed resets the clock on its first interest rate cut. Data prints later in the week are likely to help finesse policy bets, with both US growth and the Fed’s preferred measure of inflation due. Investors must also absorb a hefty slate of Treasuries auctions, a major test of whether yields have peaked for the year.

    Higher-than-expected interest rates amid persistent inflation are perceived as the biggest threat to financial stability among market participants and observers, the Fed said in its semiannual Financial Stability Report published Friday.

    More than half of the “Magnificent Seven” cohort of tech megacaps will report earnings this week — leaving investors wondering whether those firms are going to live up to the high expectations set for artificial intelligence. “Nevertheless, this may offer market participants the opportunity to watch for any signs of weakness in rallies to sell the rip.”

    “This week will present a slew of big tech earnings, which has the tendency to crush earnings expectations,” said Jun Rong Yeap, a market strategist at IG Asia.

    Profits for the seven biggest growth companies in the S&P 500 — Apple Inc., Microsoft Corp., Alphabet Inc., Amazon.com Inc., Nvidia, Meta Platforms Inc. and Tesla Inc. — are on course to surge 38% in the first quarter, according to Bloomberg Intelligence. When excluding them, the rest of the benchmark index’s profits are anticipated to shrink by 3.9%.

    Elsewhere this week, inflation readings in Australia and Malaysia are due. Bank Indonesia will give a policy decision just as the currency comes under pressure, while earnings at global growth bellwether Caterpillar are due.

    Key events this week:

    • Eurozone consumer confidence, Monday

    • Philippines and US military forces commence annual war games near Taiwan and South China Sea, Monday

    • ECB President Christine Lagarde speaks, Monday

    • Eurozone S&P Global Manufacturing PMI, S&P Global Services PMI, Tuesday

    • UK S&P Global, CIPS Manufacturing PMI, Tuesday

    • Australia CPI, Wednesday

    • Indonesia rate decision, Wednesday

    • IBM, Boeing, Meta Platforms earnings, Wednesday

    • Malaysia CPI, Thursday

    • South Korea GDP, Thursday

    • Turkey rate decision, Thursday

    • US GDP, wholesale inventories, initial jobless claims, Thursday

    • Microsoft, Alphabet, Airbus, Caterpillar earnings, Thursday

    • Japan rate decision, Tokyo CPI, inflation and GDP forecasts, Friday

    • US personal income and spending, University of Michigan consumer sentiment, Friday

    • Exxon Mobil, Chevron earnings, Friday

    Some of the main moves in markets:

    Stocks

    • S&P 500 futures rose 0.3%, ending a six-day losing streak as of 11:48 a.m. Tokyo time

    • Nikkei 225 futures (OSE) rose 0.7%

    • Japan’s Topix rose 1.3%, more than any closing gain since March 21

    • Australia’s S&P/ASX 200 rose 1%, more than any closing gain since March 21

    • Hong Kong’s Hang Seng rose 2.3%, more than any closing gain since April 2

    • The Shanghai Composite rose 0.1%

    • Euro Stoxx 50 futures rose 0.4%

    Currencies

    • The Bloomberg Dollar Spot Index fell 0.1%

    • The euro was little changed at $1.0666

    • The Japanese yen was little changed at 154.65 per dollar

    • The offshore yuan was little changed at 7.2516 per dollar

    Cryptocurrencies

    • Bitcoin rose 0.2% to $64,756.97

    • Ether fell 0.2% to $3,143.95

    Bonds

    • The yield on 10-year Treasuries advanced four basis points to 4.66%

    • Australia’s 10-year yield advanced seven basis points, more than any closing advance since April 11

    Commodities

    • West Texas Intermediate crude fell 0.3% to $82.92 a barrel

    • Spot gold fell 0.7% to $2,375.91 an ounce

    This story was produced with the assistance of Bloomberg Automation.

    –With assistance from Matthew Burgess, Michael G. Wilson, Richard Henderson and Tassia Sipahutar.

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    ©2024 Bloomberg L.P.

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