Today we take a look at the development of Bitcoin and its correlation with other assets. This is important to know in case you are looking to diversify your portfolio or you hold bitcoin for portfolio balancing reasons.

Here is a chart i have created based on correlation data from VanEck.

As you can see, up until 2019, Bitcoin had little correlation with other assets, but from 2020 seems to be much more correlated!

We have noticed this too recently when the stock market pulls back, we are seeing large pullbacks in Bitcoin. What could this mean for the future? And what has changed in the market to make it more correlated? Is Bitcoin still a good diversification from the fiat monetary system?

Trends for 2021-2022

In a recent report by Blockworks, they have noticed that this trend with the stock market and Bitcoin decreased slightly in the first half of 2021, but then from September 2021, the correlation increased and reached a new ATH of correlation. 

Thanks for reading.