ETFs Provide Tailwind to Other Digital Assets

2023 was also a period of declining macroeconomic correlations across digital assets. Cryptocurrencies were accepted as cryptocurrencies and were decoupled from US stocks and gold for most of the year, despite lower levels of realized volatility than previous years (see rolling correlation chart above). Surprisingly, Ethereum achieved almost the same level of volatility as Bitcoin in 2023. Breaking from the historical norm of typically realizing up to 20% higher, Bitcoin’s volatility falls to levels similar to single stock volatility and more in line with traditional asset classes.