• BTC correlation with major US indexes oscillates around the zero mark, with frequent negative correlation periods.
  • Rothschild Investment tripled their BTC holdings in Q2 2021 as per the latest SEC filing.
  • More investors seek exposure to uncorrelated assets like BTC to diversify their portfolios.

Bitcoin’s receding correlation with stock indexes is bullish for the asset. A negative correlation increases its utility as a market hedge in traders’ portfolios.

Major US indexes are now more uncorrelated with BTC, bullish for the asset

Among other major indexes, the US Dollar Index and VIX Index have become more uncorrelated with Bitcoin. The indices correlation currently stand at -0.42 and -0.63, respectively, based on Into The Block data.

The BTC correlation with other indexes – Nasdaq 100, S&P 500, and Dow Jones Industrial Average – oscillates around the zero mark, close to becoming uncorrelated. Periods of negative correlation with BTC have become increasingly common for US stock market indices since May 2021. BTC price has suffered a drop since then. 

More traditional finance traders seeking a diversified portfolio are turning to Bitcoin. Looking for exposure to non-correlated assets, these traders are likely to increase the demand for Bitcoin. The cryptocurrency has potential utility as a market hedge. 

Institutional investors are increasing their exposure to Bitcoin consequently. Rothschild Investment, a money management firm, more than tripled its exposure to Bitcoin in Q2 2021. Based on their latest SEC filing, the firm increased its Grayscale Bitcoin Trust (GBTC) shares from 38,346 in Q1 to 141,405 in Q2. 

The Chicago-based investment firm’s BTC holdings are currently worth $4.2 million. The firm’s latest purchase coincided with a Bitcoin price drop in the market. However, the price drop likely had no impact on Rothschild Investment’s decision to buy GBTC shares. 

Grayscale CEO Michael Sonnenshein commented on Bitcoin’s price drop and its impact on institutional buying, 

Investors in this asset class are really not focused on the short-term or really short-term movements in price. These are the investors looking at their allocations medium to longer term. And so any volatility or even dampening of volatility is not something that anyone is hazed by.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

Bitcoin price action over the last 72 hours indicates that a massive bullish move is coming. In the last two articles, we have taken a look at why this is possible from a technical and on-chain perspective. 

More Bitcoin News

Luna Classic price: Binance burned 6 billion LUNC, triggering massive rally in the altcoin

Luna Classic price: Binance burned 6 billion LUNC, triggering massive rally in the altcoin

Luna Classic (LUNC) price witnessed a massive spike on Friday, after yielding 12% gains overnight. The move came after the world’s largest crypto exchange, Binance announced it would be burning 6.39 billion LUNC tokens. 

More Luna Classic News

Binance native token BNB and staking derivatives bleed after $5 million DeFi exploit on Ankr Protocol

Binance native token BNB and staking derivatives bleed after $5 million DeFi exploit on Ankr Protocol

Binance’s native token BNB suffered a 3% decline in response to the $5 million exploit on DeFi protocol Ankr Protocol. The BNB chain-based protocol confirmed that it has fallen victim to a multi-million dollar exploit. 

More Binance Coin News

Cardano price gets underpinned, could move 10% north before New Year

Cardano price gets underpinned, could move 10% north before New Year

Cardano (ADA) price action is trading in more quiet waters as the spillover effects and aftermath of FTX and BlockFi bankruptcies are finally easing into the background. 

More Cardano News

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

A massive bullish move is coming. In the last two articles, we have taken a look at why this is possible from a technical and on-chain perspective. In this weekly forecast, we will take a look at Bitcoin’s monthly performance for the last decade and determine if this bullish outlook is possible. 

Read full analysis

BTC

ETH

XRP