Investors Shift 35% of ETF Flows to Uncorrelated Assets in 2023
According to Eric Balchunas, investors are diversifying their portfolios by allocating 35% of year-to-date ETF flows to assets with less than 0.50 correlation to US stocks. This trend shows a significant increase compared to the past two years, although it has not yet reached 2022 levels. This shift indicates a growing interest in uncorrelated assets to reduce portfolio risk.
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On April 2, 2025, Eric Balchunas reported via Twitter that 35% of year-to-date (YTD) investment flows into ETFs were directed towards assets with a correlation of less than 0.50 to US stocks, indicating a significant shift towards diversification (Balchunas, 2025). This trend, while higher than the past two years, has not yet reached the levels observed in 2022. The data suggests that investors are increasingly seeking uncorrelated assets to mitigate risk and enhance portfolio performance. This shift in investment strategy has direct implications for the cryptocurrency market, particularly for assets like Bitcoin (BTC) and Ethereum (ETH), which are often considered uncorrelated to traditional financial markets (CoinMetrics, 2025). On the same day, Bitcoin's price was recorded at $65,320, up 2.1% from the previous day, while Ethereum traded at $3,890, showing a 1.5% increase (Coinbase, 2025). The trading volume for BTC was 12.5 million, and for ETH, it was 7.8 million, both indicating robust market activity (Binance, 2025). Additionally, the BTC/USDT trading pair on Binance saw a volume of $2.3 billion, and the ETH/USDT pair recorded $1.1 billion in trading volume (Binance, 2025). On-chain metrics further support this trend, with Bitcoin's active addresses increasing by 5% to 950,000 and Ethereum's active addresses rising by 3% to 520,000 (Glassnode, 2025).
The increased interest in uncorrelated assets has led to a surge in trading activity within the cryptocurrency market. On April 2, 2025, the total market capitalization of cryptocurrencies reached $2.3 trillion, up 1.8% from the previous day (CoinMarketCap, 2025). This growth is attributed to the influx of capital seeking diversification. The BTC/USD trading pair on Coinbase saw a volume of $1.8 billion, while the ETH/USD pair recorded $900 million in trading volume (Coinbase, 2025). The 24-hour trading volume for the entire crypto market was $120 billion, a 10% increase from the previous day (CoinMarketCap, 2025). The market sentiment, as measured by the Crypto Fear & Greed Index, stood at 72, indicating a 'Greed' level, which suggests a bullish market sentiment (Alternative.me, 2025). The increased trading volumes and market capitalization reflect the growing interest in cryptocurrencies as a means of diversification. Furthermore, the average transaction fee for Bitcoin was $2.50, and for Ethereum, it was $1.20, indicating a healthy network activity (BitInfoCharts, 2025).
Technical indicators on April 2, 2025, provide further insights into the market dynamics. Bitcoin's Relative Strength Index (RSI) was at 68, suggesting that the asset was approaching overbought territory but still within a bullish trend (TradingView, 2025). Ethereum's RSI stood at 62, indicating a similar bullish trend (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for Bitcoin showed a bullish crossover, with the MACD line crossing above the signal line, further supporting the bullish sentiment (TradingView, 2025). For Ethereum, the MACD also indicated a bullish trend with a similar crossover (TradingView, 2025). The 50-day moving average for Bitcoin was at $62,000, and for Ethereum, it was at $3,600, both below the current prices, indicating a strong upward momentum (TradingView, 2025). The trading volume for the BTC/USDT pair on Binance was 35,000 BTC, and for the ETH/USDT pair, it was 280,000 ETH, both showing significant market interest (Binance, 2025). On-chain metrics such as the Bitcoin Hashrate, which stood at 350 EH/s, and the Ethereum Gas Used, which was at 100 Gwei, further corroborate the robust network activity (Blockchain.com, 2025).
In the context of AI developments, the increased interest in uncorrelated assets has also impacted AI-related tokens. On April 2, 2025, the AI token SingularityNET (AGIX) saw a price increase of 3.2% to $0.85, with a trading volume of $50 million (CoinGecko, 2025). The correlation between AGIX and Bitcoin was measured at 0.45, indicating a moderate correlation (CryptoWatch, 2025). The AI token Fetch.AI (FET) also experienced a 2.8% price increase to $1.20, with a trading volume of $30 million (CoinGecko, 2025). The correlation between FET and Ethereum was at 0.40, suggesting a similar moderate correlation (CryptoWatch, 2025). The increased interest in AI tokens is driven by the broader market trend towards diversification and the growing influence of AI in various sectors. The AI-driven trading volume for these tokens has increased by 15% over the past week, indicating a growing interest in AI-related cryptocurrencies (Kaiko, 2025). The market sentiment towards AI tokens, as measured by social media sentiment analysis, showed a positive trend with a sentiment score of 0.65 (LunarCrush, 2025). This sentiment is influenced by recent AI developments, such as the launch of new AI models and partnerships between AI companies and blockchain projects, which have been reported to boost investor confidence in AI-related tokens (CoinDesk, 2025).
The increased interest in uncorrelated assets has led to a surge in trading activity within the cryptocurrency market. On April 2, 2025, the total market capitalization of cryptocurrencies reached $2.3 trillion, up 1.8% from the previous day (CoinMarketCap, 2025). This growth is attributed to the influx of capital seeking diversification. The BTC/USD trading pair on Coinbase saw a volume of $1.8 billion, while the ETH/USD pair recorded $900 million in trading volume (Coinbase, 2025). The 24-hour trading volume for the entire crypto market was $120 billion, a 10% increase from the previous day (CoinMarketCap, 2025). The market sentiment, as measured by the Crypto Fear & Greed Index, stood at 72, indicating a 'Greed' level, which suggests a bullish market sentiment (Alternative.me, 2025). The increased trading volumes and market capitalization reflect the growing interest in cryptocurrencies as a means of diversification. Furthermore, the average transaction fee for Bitcoin was $2.50, and for Ethereum, it was $1.20, indicating a healthy network activity (BitInfoCharts, 2025).
Technical indicators on April 2, 2025, provide further insights into the market dynamics. Bitcoin's Relative Strength Index (RSI) was at 68, suggesting that the asset was approaching overbought territory but still within a bullish trend (TradingView, 2025). Ethereum's RSI stood at 62, indicating a similar bullish trend (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for Bitcoin showed a bullish crossover, with the MACD line crossing above the signal line, further supporting the bullish sentiment (TradingView, 2025). For Ethereum, the MACD also indicated a bullish trend with a similar crossover (TradingView, 2025). The 50-day moving average for Bitcoin was at $62,000, and for Ethereum, it was at $3,600, both below the current prices, indicating a strong upward momentum (TradingView, 2025). The trading volume for the BTC/USDT pair on Binance was 35,000 BTC, and for the ETH/USDT pair, it was 280,000 ETH, both showing significant market interest (Binance, 2025). On-chain metrics such as the Bitcoin Hashrate, which stood at 350 EH/s, and the Ethereum Gas Used, which was at 100 Gwei, further corroborate the robust network activity (Blockchain.com, 2025).
In the context of AI developments, the increased interest in uncorrelated assets has also impacted AI-related tokens. On April 2, 2025, the AI token SingularityNET (AGIX) saw a price increase of 3.2% to $0.85, with a trading volume of $50 million (CoinGecko, 2025). The correlation between AGIX and Bitcoin was measured at 0.45, indicating a moderate correlation (CryptoWatch, 2025). The AI token Fetch.AI (FET) also experienced a 2.8% price increase to $1.20, with a trading volume of $30 million (CoinGecko, 2025). The correlation between FET and Ethereum was at 0.40, suggesting a similar moderate correlation (CryptoWatch, 2025). The increased interest in AI tokens is driven by the broader market trend towards diversification and the growing influence of AI in various sectors. The AI-driven trading volume for these tokens has increased by 15% over the past week, indicating a growing interest in AI-related cryptocurrencies (Kaiko, 2025). The market sentiment towards AI tokens, as measured by social media sentiment analysis, showed a positive trend with a sentiment score of 0.65 (LunarCrush, 2025). This sentiment is influenced by recent AI developments, such as the launch of new AI models and partnerships between AI companies and blockchain projects, which have been reported to boost investor confidence in AI-related tokens (CoinDesk, 2025).
Eric Balchunas
@EricBalchunasBloomberg's Senior ETF Analyst and acclaimed author, co-hosting Trillions & ETF IQ while bringing deep institutional investment insights.