BlackRock Praises Bitcoin as Portfolio Diversifier as BTC Price Tops $70K

According to financial giant BlackRock, Bitcoin is still a good portfolio diversified despite its high correlation with stocks, according to a recent report by CNBC. 

In November, Bitcoin's correlation with stocks collapsed to the lowest level since early 2020. Prior to that, the flagship cryptocurrency would move mostly in tandem with traditional stocks since it was being traded as a typical risk-on asset.

However, despite the significant decline in 2023, this correlation is on the rise yet again even though there are some signs of Bitcoin decoupling from tech equities and high-beta stocks.

In early February, Eric Chen, chief executive and co-founder at Injective Labs, argued that the correlation level would be on the rise due to the launch of Bitcoin exchange-traded funds (ETFs).

Since Bitcoin has now become part of portfolios of large funds, Chen argued that it would be "natural" for the cryptocurrency to be tied to Wall Street. 

Bitcoin reclaims the $70,000 level

Despite BlackRock's Bitcoin ETF seeing dwindling inflows, the price of the largest cryptocurrency has managed to reclaim the pivotal $70,000 level. It is currently trading at $70,566 on the Bitstamp exchange.

Analytics platform Santiment has pointed to significant accumulation of Bitcoin by key investors, with wallets holding between 10 and 10,000 BTC accumulating over 51,959 BTC in a single day. This represents 0.263% of the total available supply. 

The continued accumulation of Bitcoin by these wallets signals optimism among investors. This could potentially lead to a positive impact on the overall cryptocurrency market caps. 

However, it's noted that this accumulation ideally shouldn't come at the expense of liquidity in stablecoins like USDT and USDC, which are important for facilitating trading and providing liquidity in the crypto market.