{"id":7309,"date":"2026-03-09T07:57:42","date_gmt":"2026-03-09T07:57:42","guid":{"rendered":"https:\/\/cryptonews.uk.com\/?p=7309"},"modified":"2026-03-09T07:57:42","modified_gmt":"2026-03-09T07:57:42","slug":"bitcoins-stock-correlation-doesnt-undermine-its-diversification-role","status":"publish","type":"post","link":"https:\/\/cryptonews.uk.com\/?p=7309","title":{"rendered":"Bitcoin\u2019s Stock Correlation Doesn\u2019t Undermine Its Diversification Role"},"content":{"rendered":"

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  • Although Bitcoin is no longer being priced as a macro hedge or rate\/inflation trade, Bitcoin\u2019s recent correlation with U.S. software equities doesn\u2019t mean it has become a tech-stock proxy, analysis from financial services firm NYDIG finds.\u00a0<\/span><\/li>\n
  • While correlations have risen to around 0.5, the firm argues that most of bitcoin\u2019s price movements are still driven by crypto-specific factors such as fund flows, derivatives positioning, adoption trends, and regulation.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n

    Bitcoin\u2019s reputation as a hedge against TradFi market turmoil is over. Its price is increasingly moving in line with risk assets in traditional markets \u2014 namely, U.S. stocks.\u00a0<\/p>\n

    Bloomberg reported the 30-day correlation coefficient for BTC and the S&P 500 hit 0.74 last week, which is the highest level this year (the closer the value is to 1, the more the assets move in tandem). Bloomberg Intelligence ETF analyst Athanasios Psarofagis said, \u201cThis goes against the benefit of Bitcoin during a spike in volatility.\u201d<\/p>\n

    However, recent analysis from financial services firm NYDIG finds that while Bitcoin is now being priced as a volatile growth asset, BTC and US software equities have not \u201cstructurally converged\u201d and the OG crypto still has a role to play as a portfolio diversifier.<\/p>\n

    In a note released March 6, NYDIG\u2019s Global Head of Research, Greg Cipolaro, said that despite some claims that BTC\u2019s price is now coupled with US SaaS tech stocks, their alignment has been \u201coverstated.\u201d<\/p>\n

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    The recent price action more plausibly reflects shared exposure to the current macro regime, specifically long-duration, liquidity-sensitive risk assets, rather than evidence of a structural convergence between bitcoin and software equities.<\/em><\/p>\n<\/div>\n

    \n Greg Cipolaro, NYDIG Global Head of Research <\/div>\n<\/div>\n

    He said current buyers of Bitcoin \u201cappear to be macro- and equity-sensitive, allocating along the risk curve, rather than capital expressing a distinct monetary thesis.\u201d<\/p>\n

    Related: Scaramucci Blames Trump\u2019s \u201cGrift\u201d for CLARITY Act Delays, But Says Bitcoin Could Hit $100K<\/strong><\/p>\n

    Cipolaro argues that the majority of BTC\u2019s price movement remains unexplained by equities. He said:<\/p>\n

      \n
    • Correlations to IGV (iShares Expanded Tech-Software Sector ETF), the Nasdaq, and the S&P 500 have been within the 0.5 range.<\/li>\n
    • That implies an R-squared of roughly 0.25, meaning only about one-quarter of bitcoin\u2019s moves are explained by that single equity factor.<\/li>\n<\/ul>\n

      He said the remaining 75% of drivers are unique to Bitcoin, such as asset-wide fund flows, network activity and adoption trends, trader and derivatives positioning, and regulatory and policy developments.\u00a0<\/p>\n

      \n
      \n

      That differentiation supports bitcoin\u2019s role as a portfolio diversifier. While cross-asset correlations with equities are currently elevated, they remain far from determinative of bitcoin\u2019s returns.<\/em><\/p>\n<\/div>\n

      \n Greg Cipolaro, NYDIG Global Head of Research <\/div>\n<\/div>\n

      NYDIG Weighs in on Bitcoin Sovereign Reserve Issue<\/h2>\n

      In light of recent commentary from venture capitalist Chamath Palihapitiya and well-known hedge fund founder Ray Dalio, expressing doubt over Bitcoin\u2019s role in central bank or sovereign reserves \u2014 NYDIG\u2019s Greg Cipolaro posits that the standards by which Bitcoin is being judged have changed.<\/p>\n

      \u201cAs bitcoin evolved from a fringe alternative for individuals disillusioned with the post-GFC banking system into an institutional portfolio allocation, expectations have changed,\u201d he said.<\/p>\n

      He said the fact that Palihapitiya and Dalio have flagged Bitcoin\u2019s risks and structural constraints simply reflects that Bitcoin is now being evaluated as an asset within \u201cthe monetary order\u201d.\u00a0\u00a0<\/p>\n

      Related: Bitcoin Hovers Around $70K as Weak Demand and Defensive Positioning Signal Fragile Market, Says Glassnode<\/strong><\/p>\n

      But Cipolaro also said that NYDIG believes central bank adoption isn\u2019t needed to fuel Bitcoin\u2019s growth anyway. He said Bitcoin has been \u201cbuilt from the edge inward\u201d where retail investment has led its adoption curve, followed by institutional involvement \u2014 which is different to prior technological revolutions.<\/p>\n

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      \n

      Central bank ownership may ultimately validate the asset class further, but it is not a prerequisite for continued growth.<\/em><\/p>\n<\/div>\n

      \n Greg Cipolaro, NYDIG Global Head of Research <\/div>\n<\/div>\n

      \u201cBitcoin\u2019s value comes from its globally distributed network, political neutrality, and technical and economic properties that enable censorship-resistant value transfer, digital scarcity, and independent operation free from any single government, institution, or monetary authority,\u201d he said.<\/p>\n<\/p><\/div>\n

      Bitcoin,NYDIG#Bitcoins #Stock #Correlation #Doesnt #Undermine #Diversification #Role1773043062<\/p>\n","protected":false},"excerpt":{"rendered":"

      Although Bitcoin is no longer being priced as a macro hedge or rate\/inflation trade, Bitcoin\u2019s recent correlation with U.S. software equities doesn\u2019t mean it has become a tech-stock proxy, analysis from financial services firm NYDIG finds.\u00a0 While correlations have risen to around 0.5, the firm argues that most of bitcoin\u2019s price movements are still driven<\/p>\n","protected":false},"author":1,"featured_media":7310,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[42,1144,3160,1052,2283,1304,3159],"class_list":{"0":"post-7309","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-bitcoin","8":"tag-bitcoins","9":"tag-correlation","10":"tag-diversification","11":"tag-doesnt","12":"tag-role","13":"tag-stock","14":"tag-undermine"},"yoast_head":"\nBitcoin\u2019s Stock Correlation Doesn\u2019t Undermine Its Diversification Role - 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