Bitcoin's correlation with the S&P 500 has plummeted, U.Today reports

Bitcoin, the largest cryptocurrency by market capitalization, now has a "mostly negative" correlation with the SP 500, one of the benchmark U.S. stock market indices, Fidelity executive Jurrien Timmer revealed in a recent post on the X social media network, Timmer wrote on X: "For those in the 60/40 space and with Bitcoin on the menu, it's important to note that Bitcoin's correlation with equities has declined dramatically, and its annualized volatility has also decreased." The negative correlation means that Bitcoin is a more attractive option for diversified portfolios. However, it also makes it more difficult for cryptocurrency traders to decipher price movements, as Bitcoin may not move in tandem with stocks based on macroeconomic data.In 2022, the largest cryptocurrencies fell in tandem with stocks as the Federal Reserve rushed to raise interest rates in an effort to curb runaway inflation. For example, in March 2022, bitcoin's correlation with the SP 500 spiked to nearly 0.50, its highest level since 2020. However, this correlation begins to decline in 2023. This makes Bitcoin an attractive investment option once again, as the flagship cryptocurrency has the ability to once again serve as a "solid diversifier," research firm K33 said in March 2023.