The surge in correlation between Bitcoin and the Japanese yen over the past 90 days is prompting investors to reassess crypto’s role as a portfolio diversifier.
While the crypto market has long focused on the dollar index and US interest rates, recent data shows a sharp strengthening in the relationship between Bitcoin’s price and the Japanese yen. The 90 day correlation between the two assets has climbed above 0.85, marking an all time high.
Market data indicates that the correlation coefficient between Bitcoin and a yen based index has reached 0.86. This means that roughly 73 percent of Bitcoin’s price movements over the past three months have occurred in the same direction as the yen, suggesting that Bitcoin is closely tracking currency dynamics in the short term.
This trend challenges Bitcoin’s long standing narrative as an independent asset for diversification. As Bitcoin becomes more sensitive to fluctuations in the Japanese currency, investors may find themselves increasingly tied to a single macroeconomic storyline. Analysts warn that this shift could weaken Bitcoin’s positioning as a form of digital gold.
