Bitcoin more of a ‘diversifier’ than safe-haven asset: Report

Published

5 months ago

May 14, 2025

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Bitcoin more of a ‘diversifier’ than safe-haven asset: Report

Bitcoin’s fluctuating correlation with US equities is raising questions about its role as a global safe-haven asset during periods of financial stress.

Bitcoin (BTC) exhibited a strong negative correlation with the US stock market when analyzing the short-term, seven-day trailing correlation, according to new research from blockchain data provider RedStone Oracles, shared exclusively with Cointelegraph.

However, RedStone said that the 30-day indicator signals a “variable correlation” between Bitcoin price and the S&P 500 index, with the correlation coefficient ranging from -0.2 to 0.4.

This fluctuating correlation suggests that Bitcoin “doesn’t consistently function as a true hedge for equities” due to its lack of a strong negative correlation below -0.3, which is needed for “reliable counter movement during market stress,” the report said.

The research suggests that while Bitcoin may not be a dependable hedge against stock market declines, it offers value as a portfolio diversifier.

This fluctuating dynamic signals that Bitcoin often moves independently from other assets, potentially offering additional returns while other assets are struggling. Still, Bitcoin has yet to mirror the safe-haven dynamics of gold and government bonds, RedStone suggests.

Bitcoin needs to “mature” before decoupling from stock market

While Bitcoin is poised to grow into a safe-haven asset in the future, the world’s first cryptocurrency still needs to “mature” as a global asset, according to Marcin Kazmierczak, co-founder and chief operating officer at RedStone.

“Bitcoin still needs to mature before decoupling from stock markets,” Kazmierczak told Cointelegraph, adding:

“Increased institutional adoption will absolutely help — we’re already seeing this effect with corporate treasury investments reducing Bitcoin’s 30-day volatility and with BlackRock repetitively praising BTC as an asset in a portfolio.”

Meanwhile, Bitcoin will see growing recognition as a portfolio diversifier, with an annualized return of over 230% for the past five years, which “significantly outperformed” both stocks and traditional safe-haven assets, Kazmierczak said, adding that “even a small 1–5% Bitcoin allocation can meaningfully enhance a portfolio’s risk-adjusted returns.”

Meanwhile, Bitcoin’s declining volatility supports BTC’s growing maturity as a global financial asset. Bitcoin’s weekly volatility hit a 563-day low on April 30, a development that may signal more stable price action.

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.

Magazine: Uni students crypto ‘grooming’ scandal, 67K scammed by fake women: Asia Express

Politics

Bankman-Fried says his biggest mistake was handing FTX to new CEO before bankruptcy

Published

7 hours ago

October 4, 2025

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Bankman-Fried says his biggest mistake was handing FTX to new CEO before bankruptcy

Sam Bankman-Fried claimed that handing over FTX to its current CEO was the “single biggest mistake” that prevented him from saving the exchange.

Politics

Kemi Badenoch says Tories will quit ECHR if they win next election

Published

13 hours ago

October 4, 2025

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Kemi Badenoch says Tories will quit ECHR if they win next election

The Conservative Party will leave a key human rights treaty if it wins the election, its leader Kemi Badenoch has said.

Ms Badenoch announced the policy to leave the European Convention on Human Rights (ECHR) ahead of the Conservative Party’s conference next week.

Despite many Tory MPs having expressed displeasure with the treaty, and the court that upholds treaty rights in recent years, it had not been party policy for the UK to exit it.

The move follows a review on the impact of the UK’s ECHR membership conducted by shadow attorney general Baron Wolfson.

Lord Wolfson’s nearly 200-page report said the ECHR had impacted government policy in numerous areas.

The report said this includes limiting government’s ability to address immigration issues, potentially hampering restrictions on climate change policy, and impacting government ability to prioritise British citizens for social housing and public services.

But leaving the ECHR would “not be a panacea to all the issues that have arisen in recent years”, Lord Wolfson said.

It comes after the Reform Party in August said they would take the UK out of the ECHR if elected.

The Conservatives have increasingly come under threat from Reform and are being trailed in the polls by them.

What is the ECHR?

The ECHR was established in the 1950s, drafted in the aftermath of the Second World War and the Holocaust, to protect people from serious human rights violations, with Sir Winston Churchill as a driving force.

It’s 18 sections guarantee rights such as the right to life, the prohibition of torture, the right to a fair trial, the right to private and family life and the right to freedom of expression.

It has been used to halt the deportation of migrants in 13 out of 29 UK cases since 1980.

A political issue

Leaving the ECHR would breach the 1998 Good Friday Agreement, the peace settlement deal between the British and Irish governments on how Northern Ireland should be governed.

Labour has in recent days said it was considering how Article 3, the prohibition on torture, and Article 8,
the right to respect for private and family life, are interpreted. The sections have been used to halt deportation attempts.

The Liberal Democrats and Greens are in favour of the ECHR.

A general election is not expected until 2029.