In the latest analysis from Matrixport, it is stated that Bitcoin is undergoing a transformation from a high-risk investment vehicle to a safer asset class suitable for institutional investors.
Bitcoin's Role on Wall Street
Matrixport sees Bitcoin's ideal role for Wall Street as a "standalone" investment vehicle with low correlation to traditional assets. This enables portfolio diversification, providing protection against market volatility and allowing Bitcoin to be included in institutional portfolios with confidence.
Correlation with Traditional Assets
However, the report highlights that the correlation between Bitcoin and U.S. stocks remains high at 72%, indicating that Bitcoin is not fully independent of classical markets. Although this correlation has weakened somewhat recently, it is attributed to Bitcoin lagging behind the S&P 500 as U.S. stock markets reach record levels.
Attracting Institutional Investors
The decline in Bitcoin's volatility is attracting the attention of institutional investors, especially those focused on risk management. Matrixport highlights the importance of predictability and stability of the investment for institutional investors, concluding: "The decrease in volatility and correlation with U.S. equities makes Bitcoin an asset that can be included in institutional investment portfolios. This transformation indicates that Bitcoin has evolved from a high-risk speculative instrument to a new generation asset class that better meets institutional criteria."
Thus, the reduction of Bitcoin's volatility and correlation with traditional assets may indicate its transformation into a structurally safer asset class for institutional investors.
