Crypto Sectors Outpace Bitcoin (BTC) in Volatility as Correlations Fall

Crypto sectors are becoming less correlated with Bitcoin (BTC), which accounts for about half of return variation across the six groups tracked. Every sector in the breakdown had higher annualized volatility than Bitcoin’s recent level of about 43%.

Artificial intelligence had the highest annualized volatility, at 85%, followed by consumer and culture at 76% and utilities and services at 67%. Financials registered 59%, smart contract platforms 58% and currencies 49%.

Bitcoin’s share of return variation differed by sector. It accounted for 46% in consumer and culture, 43% in currencies, 38% in smart contract platforms and 35% in artificial intelligence. The figure was 30% for both financials and utilities and services.

Lower correlation with Bitcoin does not mean lower risk; the remaining return variation reflects sector-specific factors.