The relationship between Bitcoin (BTC) and traditional asset classes is increasingly important for investors seeking diversification and hedging strategies. A recent FTSE Russell report indicates that since 2020, the correlation between BTC and risk-on assets has sharply risen. Specifically, the Bitcoin correlation with the Russell 1000 index, which comprises U.S. large-cap stocks, is noted at 0.58. BTC shows similarly high correlations with U.S. financial (0.53) and tech stocks (0.52). Additionally, BTC's correlation with U.S. high-yield credit is at 0.49. In contrast, the correlation with gold remains low at 0.15, suggesting distinct prioritization and trading behaviors between these asset classes. The report emphasizes the inherent volatility of BTC and its nature as a primarily risk-on asset, differing from gold's long-standing role as a safe haven. Notably, U.S. Treasurys exhibited a unique lack of higher correlation post-COVID, and the U.S. dollar represents the only asset with a negative correlation to BTC and Ethereum (ETH) recently. Overall, investors may view these correlations as critical indicators for investment strategies.

Source 🔗