Bitcoin still diversifies portfolios despite trading like tech stocks

Bitcoin’s recent tendency to move in step with U.S. equities has not erased its value as a portfolio diversifier, NYDIG says. In a weekly market note, Greg Cipolaro, the firm’s global head of research, observed that correlations with benchmarks such as the S&P 500, the Nasdaq 100 and the software-heavy IGV ETF have risen in recent months.

A correlation near 0.5 means equities explain roughly one quarter of bitcoin’s movements, Cipolaro wrote, leaving about three quarters tied to crypto-specific forces: capital flows into bitcoin funds, shifts in derivatives positioning, network adoption trends and regulatory developments.

He argues the recent alignment likely reflects the current macro backdrop, since both bitcoin and growth stocks respond to liquidity conditions and investor appetite for risk, and that elevated correlations remain far from determinative of bitcoin’s returns. The note also picked up on public debate from investors.

United States

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