#BTC Market Outlook#  Bitcoin is a ‘portfolio diversifier’ rather than a safe haven

Bitcoin’s volatile correlation with U.S. stocks raises questions about its role as a global safe-haven asset during times of financial stress.
Bitcoin BTCUSD showed a strong negative correlation with the U.S. stock market in a short-term, seven-day moving correlation analysis, according to new research shared exclusively by on-chain data provider RedStone Oracles.
However, RedStone said the 30-day indicator shows “variable correlation” between Bitcoin’s price and the S&P 500 index, with the correlation coefficient ranging from -0.2 to 0.4.
This variable correlation suggests that Bitcoin “does not serve as a real hedge against stocks due to the lack of a strong negative correlation below -0.3, which is necessary for reliable reversal during periods of market stress.”
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The study suggests that while Bitcoin may not offer a reliable hedge against stock market declines, it does offer value as a portfolio diversifier.
This volatile dynamic suggests that Bitcoin often moves independently of other assets, offering the potential for additional returns when other assets struggle. However, according to RedStone, Bitcoin has yet to mirror the safe-haven dynamics of gold and government bonds.
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Bitcoin needs to “mature” to decouple from exchange
Although Bitcoin is on track to become a safe haven asset in the future, as the world’s first cryptocurrency, it still needs to “mature” as a global asset, according to Marcin Kazmierczak, RedStone’s co-founder and chief operating officer.
“Bitcoin still needs to mature before it can decouple from the stock market,” Kazmierczak said.
“Increasing institutional adoption will definitely help. We’re already seeing this impact in the form of lower 30-day volatility as corporate treasuries invest in Bitcoin, repeatedly praising BTC as an asset in portfolios.”
Meanwhile, Kazmierczak noted that Bitcoin will increasingly be accepted as a portfolio diversifier. With an annualized return of over 230% over the past five years, Bitcoin has “significantly outperformed both stocks and traditional safe-haven assets.” Kazmierczak also noted that “even a 1–5% allocation to Bitcoin can meaningfully increase the risk-adjusted return of a portfolio.”
Meanwhile, Bitcoin’s declining volatility supports BTC’s maturation as a global financial asset. Bitcoin’s weekly volatility fell to a 563-day low on April 30, suggesting the possibility of more stable price action.
Bitcoin’s price volatility has fallen below the realized volatility of the S&P 500 and Nasdaq 100, suggesting that investors are increasingly viewing Bitcoin as a long-term investment vehicle.