Bitcoin's recent surge above $100,000 has drawn attention to a new report from RedStone questioning its status as a safe-haven asset.
Bitcoin and Its Relation to Stock Markets
RedStone's report analyzes Bitcoin's correlation with the S&P 500 over the past year. Despite some short-term fluctuations, the report suggests that the connection between Bitcoin and stocks is not strong enough to classify it as an effective hedge. Correlation values ranged from -0.2 to 0.4, which does not indicate a sustained inverse relationship.
Market Impact and Bitcoin's Role
According to the data, Bitcoin's behavior does not always correlate with stock market downturns. This sets it apart from traditional safe assets like gold and bonds, which usually increase in value when stock markets decline. Therefore, Bitcoin may be seen as a useful element for portfolio diversification but not as a reliable asset for protecting against market crashes.
Expert Opinions
Marcin Kazmierczak, co-founder and COO of RedStone, stated: "If Bitcoin truly transitions to being treated as a safe-haven asset, we would witness the most profound asset narrative transformation in modern financial history. I believe that's possible. But definitely not in such a short timespan as crypto believers would like it to be."
Thus, RedStone's report emphasizes that despite Bitcoin's recent rise, it should not be viewed as a safe asset, but rather as a diversifier in investment portfolios.
