Policy-induced monetary debasement makes de-centralised digital assets, such as cryptocurrencies, very attractive.The returns from cryptocurrencies have been staggering but so have their volatilities.One way to minimise this volatility, while enhancing returns, is to identify a set macroeconomic and market factors that influence cryptocurrency prices.One can estimate the long run relationship betweencryptocurrencies and these factors and trade the difference between thecryptocurrency price and the model price.The results are very promising – volatility is more than halved and returns are more than doubled.
