Share this article
Declining Bitcoin-Ether Correlation Could Affect Crypto Investors’ Hedging Strategies: Coinbase
From a fundamental perspective, the weaker correlation supports diversification arguments in favor of holding both BTC and ETH, the exchange said.
By Will Canny
Updated Apr 24, 2023, 2:21 p.m. Published Apr 24, 2023, 7:38 a.m.
The correlation between bitcoin (BTC) and ether (ETH) returns has been declining since mid-March, when bitcoin started outperforming against the backdrop of the U.S. banking turmoil and increased regulatory scrutiny of non-bitcoin digital assets, crypto exchange Coinbase said in a research report Friday.
The decline in the correlation has become more pronounced following the Ethereum blockchain’s Shanghai upgrade – aka Shapella, the report said, noting that a similar trend was seen in September 2022 following the network’s previous update, the Merge.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
The Shanghai upgrade, which was successfully completed on April 12, enables validators to withdraw staked ether.
“The relevance of this falling correlation for institutional investors is that it can affect quantitative strategies that rely on cross hedging one asset for the other (or using ETH as a hedge for less liquid altcoins),” analysts David Duong and Brian Cubellis wrote.
From a fundamental perspective “it supports diversification arguments in favor of holding both BTC and ETH,” they wrote.
The weakening in the 40-day correlation of daily returns may continue for another two weeks because the initial phase of ether withdrawals following the upgrade is still in effect, the note said.
Coinbase estimates that as of April 20 an additional 73,000 ether could be unlocked in partial withdrawals and 822,000 unlocked in full withdrawals and that could take about 15 days to process.
Read more: Ether-Bitcoin Ratio Likely to See Deeper Decline After Shapella Upgrade: QCP Capital
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
State Street and Galaxy to Launch Tokenized Liquidity Fund on Solana in 2026
The fund will run on Solana at launch and use PYUSD.
What to know:
- State Street and Galaxy plan to launch SWEEP in early 2026, using PYUSD for around-the-clock investor flows on Solana.
- Ondo Finance committed about $200 million to seed the tokenized liquidity fund, which will later expand to other chains.
- The firms say the product brings traditional cash-management tools onto public blockchains for qualified institutions.
Top Stories
