Correlated risk is really important to think about!
"Diversification" only matters if things are uncorrelated.
In the last 15m *all* coins are down, and DeFi coins are down a few % each.
In July, *all* DeFi was up a ton.
Market move --> all liquidations same direciton.
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Knowing about beta/correlation already makes you the top of the curve
Much less correlated in the tail though, when you need Buffett-style investors to step up during huge firesales. Eth will catch a huge bid, but others wouldn't, and that's a pretty big risk depending on how long the money market is willing to hold the collateral on the books..
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Considering this, hasn’t btc/eth as of late been uncorrelated to defi? Safe haven = btc/eth now .?
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well, at least safer.
but in a *huge* move the correlation will probably come back.
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