BTC’s evolving correlation to more traditional asset classes  

Quantifying such relationships is becoming more prevalent as investors seek diversification and hedging opportunities

article-image

NewFabrika/Shutterstock modified by Blockworks

share


This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.


Digital assets are not quite like any others. That’s part of what makes them appealing to many — but it can also spur confusion.

Trying to quantify the relationship between BTC, for example, and other asset classes is becoming more prevalent as more investors seek diversification and hedging opportunities. 

A clear finding in a recent FTSE Russell report: The rolling correlations of bitcoin and ether returns sharply increased with risk-on assets since 2020.

If we look at BTC in particular, the Russell 1000 index — comprising US large-cap stocks — has a 0.58 correlation to the asset. That relationship is nearly as strong for BTC and US financial stocks and US tech stocks — at 0.53 and 0.52, respectively. 

The correlation, since Covid, between BTC and US high-yield credit (the most “risk-on” fixed income asset class) stands at 0.49.

Prior to the Covid-19 outbreak (spurring inflation and monetary tightening), all these correlations were much closer to zero. 

7–10 year US Treasurys were rather unique in not seeing a meaningfully higher correlation to BTC after Covid. And the US dollar is the only asset showing negative correlation to BTC and ETH over those years.

Despite bitcoin often being compared to gold, the BTC-gold correlation in the post-Covid era is only 0.15.

BTC’s high volatility (and the varying importance of safe haven and store-of-value characteristics in financial markets) may obscure the “true correlation” between these assets’ returns, the report notes.

It adds: “But the true correlation may simply be low, reflecting the fact that bitcoin and ETH are predominantly risk-on assets, whereas gold has a long-established trading history as a ‘safe haven’ asset, even if they do share some store of value characteristics.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

Mainnet goes live with a 16-node federation, promising five-second block times, low fees and Bitcoin-native DeFi

article-image

Sponsored

WalletConnect Certified is not just a recognition program, it’s a movement to improve how users onboard, transact, and engage across the onchain ecosystem

article-image

In crypto investing, quantity has a quality all its own.

article-image

REX and Osprey prep to launch their Solana staking ETF

article-image

A 40% allocation to crypto today is safer than a 1% allocation was in 2021, Ric Edelman argues

article-image

The wallet doesn’t have enough memory for more apps and features but should still function, the company says