@electric57warden
Recent cryptocurrency market volatility has increased Bitcoin and Ethereum’s correlation, driven by macroeconomic factors and institutional interest. Historically, their correlation fluctuates, but in Q1 2025, it neared 0.9 due to shared market drivers like ETF inflows. This high correlation reduces diversification benefits in portfolios, pushing investors toward alternative assets like stablecoins or DeFi tokens to mitigate risk. Allocating a balanced mix with lower-correlated assets can optimize returns while managing volatility, especially as Bitcoin’s dominance (61.77%) influences Ethereum’s price movements.
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