Grayscale Report: Crypto Sectors Diversifying from Bitcoin, Higher Volatility Observed

Huo Xing Finance reports, according to Crypto Briefing, a Grayscale research study shows that the correlation between crypto assets and Bitcoin is declining, with Bitcoin now accounting for only about 50% of the return volatility across the crypto sector. The report breaks down annualized volatility and the proportion attributable to Bitcoin by sector: the currency sector has an annualized volatility of 49%, with 43% attributed to Bitcoin; the smart contract platform sector has an annualized volatility of 58%, with 38% attributed to Bitcoin; the finance sector has an annualized volatility of 59%, with 30% attributed to Bitcoin; the utilities and services sector has an annualized volatility of 67%, with 30% attributed to Bitcoin; the consumer and culture sector has an annualized volatility of 76%, with 46% attributed to Bitcoin; and the AI sector has the highest annualized volatility at 85%, with only 35% attributed to Bitcoin. The study notes that Bitcoin’s own annualized volatility has recently been around 43%, and all sectors tracked by Grayscale exhibit higher volatility than Bitcoin. The report suggests that lower correlation does not imply lower risk; however, since Bitcoin explains only half of the return volatility, the other half is driven by sector-specific factors, offering investors insight into which sectors may provide genuine diversification.