Does bitcoin act like digital gold? Embarrassingly, it moves in close correlation with risky stocks | South China Morning Post

When Wall Street makes the case for cryptocurrencies, it's all about the benefits of diversification. But when markets go down, bitcoin has an embarrassing habit of getting swept up in the sell-off. Bitcoin plunged as much as 11 per cent on Monday as stock markets trembled in the wake of a potential default from China Evergrande Group . A correlation analysis shows that US stocks and bitcoin are moving more in lockstep, with the link between the two assets at the strongest level in a year. One explanation is simply that bitcoin remains a volatile investment - meaning that when…