Cryptocurrency research firm K33 noted in a report that the declining correlation between Bitcoin and stocks is reigniting the case for investors to include assets in more diversified portfolios.
According to K33 data, the 30-day price correlation between BTC and the technology-heavy Nasdaq index fell to 0.26, the lowest level since December 2021. BTC’s correlation with the S&P 500 also plummeted last month to its lowest level since late 2021.
K33 wrote in the report that a false focus on growth and a widespread mania in financial markets have led to high correlations. Things have calmed down now. As such, BTC may once again resume serving as a reliable diversification tool.