SPX and BTC are trading like the same asset again
The 30-day correlation between the S&P 500 and Bitcoin just flipped back above 0.7. That matters for how you size.
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Live tape — what this brief is about
Bitcoin is not a diversifier right now. When SPX sneezes, BTC catches it — and that's fine, as long as you're honest about it in your risk budget. Stop pretending a 60/40 with a 5% BTC sleeve is hedged. It isn't. It's a beta sleeve with extra volatility.
What this actually means for sizing
- Treat SPX exposure and BTC exposure as one bucket, not two. Add the betas, don't average them.
- A 5% BTC sleeve at 3x SPX vol is roughly equivalent to 15% extra SPX exposure. Most people don't budget for that.
- If you've been getting away with it, it's because correlation was lower last quarter — not because the structure was sound.
What I'm doing
- Trimming BTC into strength on green SPX days, not red ones. The last 1% of the move is the weakest.
- Keeping the index hedge (SPY puts, June expiry) sized off total risk-on exposure, not just the equity book.
- Not buying the "decoupling" narrative until 30-day correlation drops below 0.4 and stays there for two weeks.
Either you want this exposure or you don't. Both answers are fine. The wrong answer is pretending you're hedged when you're stacked.
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Not financial advice. Do your own research.