New research from Grayscale suggests that crypto assets are becoming less correlated with Bitcoin. In a report released November 12, 2026, the investment firm found that Bitcoin now explains only about half of the variation in returns across crypto sectors.
The research, part of Grayscale's "The Stack" series and authored by Head of Research Zach Pandl and Research Associate Charlie Perkins, CFA, examined how much Bitcoin drives returns in different crypto sectors and found that pairwise correlations between sectors have decreased.
Volatility and Bitcoin Influence by Sector
Grayscale broke down annualized volatility by sector and estimated the portion attributable to Bitcoin-related factors:
- Currencies: 49% annualized volatility, 43% attributed to Bitcoin
- Smart Contract Platforms: 58% annualized volatility, 38% attributed to Bitcoin
- Financials: 59% annualized volatility, 30% attributed to Bitcoin
- Utilities & Services: 67% annualized volatility, 30% attributed to Bitcoin
- Consumer & Culture: 76% annualized volatility, 46% attributed to Bitcoin
- Artificial Intelligence: 85% annualized volatility, 35% attributed to Bitcoin
The Currencies sector showed the lowest volatility among the groups tracked. Financials and Utilities & Services showed the smallest Bitcoin-attributed shares at 30% each, while the Artificial Intelligence sector carried the highest annualized volatility at 85%, with only 35% tied to Bitcoin movements.
Bitcoin's Own Volatility Context
According to the research, Bitcoin's one-year realized volatility recently reached approximately 43%. Every sector Grayscale examined showed higher annualized volatility than Bitcoin itself.
Implications for Portfolio Allocation
The findings suggest that if Bitcoin explains only about half of sector returns, the other half is driven by sector-specific factors. The Bitcoin-attributed share of volatility varies across sectors, from 30% for Financials and Utilities & Services to 46% for Consumer & Culture, potentially providing allocators information about which sectors may offer diversification benefits.
The research notes that lower correlation does not necessarily indicate lower risk. Each sector examined carries volatility above Bitcoin's approximately 43% level.
