$BTC: BlackRock's ETF Chief says Bitcoin's volatility has cooled enough to keep its diversifier case alive $BTC at 86,729, +1.89% on the day · day range 85,163-87,251 · 42.23B 24h vol
BlackRock's ETF Chief says Bitcoin's volatility has cooled enough that the case for holding some as a diversifier still stands. But the same analysis flags a 0.53 correlation with the S&P 500 and a long history of deep drawdowns, which is why the recommendation stays cautious.
That 0.53 correlation number matters because a diversifier is supposed to move independently. When stocks drop and Bitcoin drops too, at least some of the time, the hedge doesn't work the way a pure allocation model assumes.
Bitcoin's volatility has come down significantly from the extremes seen in prior cycles. That cooling is what reopened the diversification argument in the first place. When swings are wild, even a small allocation can dominate portfolio risk.
But drawdowns are the other side of the coin. BlackRock points to a pattern of deep losses that Bitcoin has produced repeatedly, and that history is what caps the recommended allocation at a small size. The firm is not saying Bitcoin belongs in every portfolio at any size.
$BTC #BTC #ETF #CryptoNews
BlackRock's ETF Chief says Bitcoin's volatility has cooled enough that the case for holding some as a diversifier still stands. But the same analysis flags a 0.53 correlation with the S&P 500 and a long history of deep drawdowns, which is why the recommendation stays cautious.
That 0.53 correlation number matters because a diversifier is supposed to move independently. When stocks drop and Bitcoin drops too, at least some of the time, the hedge doesn't work the way a pure allocation model assumes.
Bitcoin's volatility has come down significantly from the extremes seen in prior cycles. That cooling is what reopened the diversification argument in the first place. When swings are wild, even a small allocation can dominate portfolio risk.
But drawdowns are the other side of the coin. BlackRock points to a pattern of deep losses that Bitcoin has produced repeatedly, and that history is what caps the recommended allocation at a small size. The firm is not saying Bitcoin belongs in every portfolio at any size.
$BTC #BTC #ETF #CryptoNews