Bitcoin’s Declining Volatility and Decoupling from US Stocks Boost Institutional Appeal

Matrixport’s latest analysis on July 2nd highlights Bitcoin’s evolving role within institutional portfolios. Traditionally viewed by Wall Street as a non-correlated asset ideal for hedging against traditional market fluctuations, Bitcoin’s actual correlation with US equities remains elevated at approximately 72%. Despite emerging signs of decoupling from the S&P 500, this divergence occurs amid record highs in US stocks, with Bitcoin lagging behind. Concurrently, Bitcoin’s volatility has notably decreased, enhancing its appeal to institutions prioritizing risk management over aggressive returns. For risk-averse investors, asset stability is paramount, and Bitcoin’s reduced price swings improve its suitability for inclusion in diversified portfolios. These structural shifts—lower volatility and diminishing correlation with equities—are progressively repositioning Bitcoin from a speculative instrument to a more institutionally viable asset class, aligning with the stringent risk parameters favored by professional investors.

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