ARK Invest founder Cathie Wood opened her firm's 2026 outlook report with a single number: 0.06. That is the weekly return correlation coefficient between Bitcoin and U.S. bonds over the period from January 2020 to early January 2026. The report argues that Bitcoin's low correlation with traditional assets makes it a powerful portfolio diversifier that can boost risk-adjusted returns.
Correlation Data: Bitcoin vs. Gold, Treasuries, and Equities
Using weekly returns data, ARK found Bitcoin's correlation with gold at roughly 0.14, with bonds at just 0.06, with the S&P 500 at about 0.28, and slightly higher but still low with REITs. In contrast, the S&P 500–REITs correlation sits at 0.79, while bonds–S&P 500 correlation is around 0.27. Cathie Wood emphasized that such low correlations can meaningfully improve a portfolio's Sharpe ratio. Forced to maintain a fixed volatility target, a portfolio without Bitcoin would have to cut equity exposure, weighing on total returns.
Supply-Side Rigidity: Post-Halving Annual Supply Drops to 0.8%
The report underscores Bitcoin's supply inelasticity: post-2024 halving, annualized new supply stabilizes at about 0.8%, set to decline to 0.4% by 2028. Unlike gold, whose supply expands with price, Bitcoin's supply is hard-coded. Any demand increase directly lifts price. Since late 2022, Bitcoin has gained roughly 360%, driven primarily by fiat liquidity and Bitcoin scarcity, not mere speculation.
Wood concluded that regardless of one's view on crypto's vision, the 0.06 correlation coefficient is now baked into institutional risk models. Ignoring Bitcoin, she argued, is no longer an ideological debate but a risk-return calculation that portfolio managers cannot afford to overlook.