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Bitcoin\u2019s fluctuating correlation with US equities is raising questions about its role as a global safe-haven asset during periods of financial stress.<\/p>\n
Bitcoin (BTC<\/a>) 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.<\/p>\n However, RedStone said that the 30-day indicator signals a \u201cvariable correlation\u201d between Bitcoin price and the S&P 500 index, with the correlation coefficient ranging from -0.2 to 0.4.<\/p>\n This fluctuating correlation suggests that Bitcoin \u201cdoesn\u2019t consistently function as a true hedge for equities\u201d due to its lack of a strong negative correlation below -0.3, which is needed for \u201creliable counter movement during market stress,\u201d the report said.<\/p>\n Related: <\/strong><\/em>$1B Bitcoin exits Coinbase in a day as analysts warn of supply shock<\/strong><\/em><\/a><\/p>\n The research suggests that while Bitcoin may not be a dependable hedge against stock market declines, it offers value as a portfolio diversifier.<\/p>\n 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.<\/p>\n Related: <\/strong><\/em>Nasdaq-listed GDC plans to buy Bitcoin and TRUMP memecoin for $300M<\/strong><\/em><\/a><\/p>\n While Bitcoin is poised to grow into a safe-haven asset in the future, the world\u2019s first cryptocurrency still needs to \u201cmature\u201d as a global asset, according to Marcin Kazmierczak, co-founder and chief operating officer at RedStone.<\/p>\n \u201cBitcoin still needs to mature before decoupling from stock markets,\u201d Kazmierczak told Cointelegraph, adding:<\/p>\n \u201cIncreased institutional adoption will absolutely help \u2014 we\u2019re already seeing this effect with corporate treasury investments reducing Bitcoin\u2019s 30-day volatility and with BlackRock repetitively praising BTC as an asset in a portfolio.\u201d<\/p><\/blockquote>\n Meanwhile, Bitcoin will see growing recognition as a portfolio diversifier, with an annualized return of over 230% for the past five years, which \u201csignificantly outperformed\u201d both stocks and traditional safe-haven assets, Kazmierczak said, adding that \u201ceven a small 1\u20135% Bitcoin allocation can meaningfully enhance a portfolio\u2019s risk-adjusted returns.\u201d<\/p>\n Meanwhile, Bitcoin\u2019s declining volatility supports BTC\u2019s growing maturity as a global financial asset. <\/strong><\/em>Bitcoin\u2019s weekly volatility<\/a> hit a 563-day low on April 30, a development that may signal more stable price action.<\/p>\nBitcoin needs to \u201cmature\u201d before decoupling from stock market<\/h2>\n