Does crypto make your portfolio less risky? Only if you do it right, experts say

Crypto tends to move with stocks during broad market sell-offs because digital assets are a "hybrid" between diversifying assets and growth assets, Willis said. Growth assets tend to have high potential for investment returns but are also high-risk, she said.

While all types of crypto don't necessarily move in tandem with bitcoin, it's the primary driver of the asset class's returns since it has the largest market share, she said.

"When investors start to get spooked a little bit, and get rid of their risk-on assets, crypto gets bundled in with that," Willis said.

In short: Don't rely on crypto as your only diversifier, she said.

Correlations can also change over time, experts said. "Assets that were once great diversifiers may no longer be so," Amy Arnott, a portfolio strategist for Morningstar, wrote in a May 2025 article.

For example, in the 10 years through April 30, 2025, bitcoin and other "major cryptocurrencies" had a correlation of less than 0.4 relative to stocks, bonds, real estate, gold, commodities, and other asset types, Arnott wrote. However, bitcoin had a correlation of 0.55 when measured against U.S. stocks for the trailing three-year period ending in April 2025, up from correlation numbers near zero or even below zero in some previous periods, she wrote.