“A perverse focus on growth and wide mania across the financial markets enabled the high correlations,” K33 wrote in the report. “Now conditions have calmed. Hence, BTC may again resume acting as a solid diversifier.”
K33 found that a small allocation to BTC improves the performance of a traditional investment portfolio.
A portfolio with 3% weight in BTC, 58.5% in stocks and 38.5% in bonds has outperformed the classic 60% equities, 40% bonds investment over the years. Even when it’s measured from January 2018, near when cryptocurrency prices entered a two-year bear market, the portfolio that included BTC would have outperformed by 6.9%, according to K33.
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- Source: https://www.fintechnews.org/bitcoins-declining-correlation-with-stocks-revives-its-appeal-for-investors-k33-research/
