Bernstein Analysts: We Have Observed a Decrease in Correlation of Cryptos with US Stock Market
Crypto markets have seen a decrease in their correlation with the US stock market, according to a note the analysts of investment research firm Bernstein.
The analysts have noted that the correlation between the two markets decreased significantly in the first quarter of 2021. They attribute the decrease to the growing institutional acceptance of cryptocurrencies, as well as the rise in DeFi projects and non-fungible tokens (NFTs).
The decrease in correlation could be beneficial for both investors and the cryptocurrency market, as it means that the cryptocurrency markets are increasingly decoupled from the traditional stock market. This could provide investors with an opportunity to diversify their portfolios and potentially earn greater returns.
Furthermore, the decrease in correlation could open up the possibility for more efficient hedging and risk management for investors, as the cryptocurrency markets are less likely to move in the same direction as the stock market.
