Crypto Still Has Diversification Benefits Bitcoin's correlati | 🛡CA Capital Announcements

Crypto Still Has Diversification Benefits

Bitcoin's correlations to equities are running high this year, prompting some investors to ponder the diversification benefits of cryptocurrency and assets such as the Valkyrie Bitcoin Strategy ETF. Over time, bitcoin and other digital assets do in fact have low correlations to traditional asset classes, such as stocks and bonds.

Some analysts argue that bitcoin's penchant for volatility can be an issue regarding portfolio diversification.

"These dramatic performance swings have continued in early 2022. After dropping 16.5% in January, the CMBI Bitcoin Index partially recovered in February and March, but is still well below previous peak levels," says Morningstar analyst Amy Arnott.

Read Article