Grayscale Report: BTC's explanatory power falls to 50%, AI sector leads with 85% volatility

According to Woofun AI, the pricing logic of the digital asset market is undergoing a structural shift, and Bitcoin's dominance as a single weather vane is declining significantly. Grayscale Research Director Zack Pandel and Research Assistant Charlie Perkins confirmed in the “Beyond Volatility: Digital Asset Risk Reassessment for Portfolio Managers” report released on the 12th that in the past 3 years, Bitcoin's explanation of yield fluctuations in major digital asset sectors has dropped to about 50%, and market trends are increasingly dependent on the growth potential of various industries and differences in supply and demand.

According to data compiled by Woofun AI, the dependence of different sectors on Bitcoin is very diverse. The AI sector has an annualized fluctuation rate of 85%, the highest among all surveyed fields, but only 35% of the fluctuation is due to the Bitcoin factor, and the rest is driven by industry growth expectations and the project's own supply and demand; the financial and utilities and services sectors are 59% and 67%, and Bitcoin's contribution is 30%; the consumer and culture sector's volatility is 76%, 46% is related to Bitcoin; the currency sector's volatility is 49%, 43% from Bitcoin, showing high dependency; the smart contract platform fluctuation rate is 58% and 38% compared to 38% Bitcoin related.

Furthermore, the correlation coefficient between major digital asset sectors dropped from around 0.9 in October 2022 to around 0.8 in October of this year, indicating the increasing independence of price trends in each sector.

Bitcoin's own fluctuation characteristics have also changed significantly. The actual volatility rate over the past year was about 43%, far lower than 81% 5 years ago and 64% of the 10-year average, and even lower than about 19% of individual stocks in the US S&P 500 index. Grayscale believes that increased institutional investor participation and improved liquidity brought about by spot listed index products (ETPs) are the main causes.

However, this doesn't mean that overall risk is reduced; the volatility in fields such as AI and finance is still higher than Bitcoin. The report emphasizes that when evaluating investment risk, it is necessary to simultaneously consider the income generation mechanism and correlation with existing assets, and that investment strategies should shift from focusing on Bitcoin to focusing on the characteristics and risk factors of different fields.