According to the financial giant BlackRock, Bitcoin is still a good diversified portfolio despite its high correlation with stocks, according to a recent CNBC report.
According to the financial giant BlackRock, Bitcoin is still a good diversified portfolio despite its high correlation with stocks, according to a recent CNBC report.
In November, Bitcoin’s correlation with stocks collapsed to the lowest level since early 2020. Before that, the flagship cryptocurrency mostly moved in tandem with traditional stocks as it was traded as a typical risk asset.
However, despite the significant decline in 2023, this correlation is increasing once again even though there are some signs of Bitcoin decoupling from technology stocks and high beta stocks.
In early February, Eric Chen, CEO and co-founder of Injective Labs, argument that the level of correlation would increase due to the launch of Bitcoin exchange-traded funds (ETFs).
With Bitcoin now part of the portfolios of large funds, Chen argued that it would be “natural” for the cryptocurrency to be tied to Wall Street.
Bitcoin recovers the $70,000 level
Even though the BlackRock Bitcoin ETF saw a decline in inflows, the price of the largest cryptocurrency has managed to regain the fundamental level of $70,000. It is currently trading at $70,566 on the Bitstamp exchange.
Analytics platform Santiment has flagged significant Bitcoin accumulation by key investors, with wallets containing between 10 and 10,000 BTC accumulating over 51,959 BTC in a single day. This represents 0.263% of the total available supply.
The continued accumulation of Bitcoin in these wallets indicates optimism among investors. This could potentially have a positive impact on overall cryptocurrency market capitalizations.
However, it is noted that ideally this accumulation should not come at the expense of liquidity in stablecoins such as USDT and USDC, which are important for facilitating trading and providing liquidity in the cryptocurrency market.
