According to Redstone Oracles, Bitcoin's correlation with US equities fluctuates, raising questions about its role as a safe-haven asset. A short-term, seven-day trailing correlation showed a strong negative correlation, while the 30-day indicator signaled a "variable correlation" between Bitcoin and the S&P 500 index, ranging from -0.2 to 0.4. This research was exclusively shared with Cointelegraph.
While Bitcoin may not be a dependable hedge against stock market declines, it offers value as a portfolio diversifier. Bitcoin's weekly volatility hit a 563-day low on April 30, signaling more stable price action.
Marcin Kazmierczak, co-founder of RedStone, stated that Bitcoin still needs to mature before decoupling from stock markets. Bitcoin has shown an annualized return of over 230% for the past five years, significantly outperforming stocks and traditional safe-haven assets.
Bitcoin's price volatility fell below the realized volatility of the S&P 500 and the Nasdaq 100, signaling that investors are increasingly treating Bitcoin as a long-term investment vehicle, Cointelegraph reported on May 13.
Increased institutional adoption will help Bitcoin mature, with corporate treasury investments reducing Bitcoin's 30-day volatility. BlackRock has repeatedly praised BTC as an asset in a portfolio.
Even a small 1-5% Bitcoin allocation can meaningfully enhance a portfolio's risk-adjusted returns, according to Kazmierczak.
This article is based on our author's analysis of materials taken from the following resources: Cointelegraph.