Saxo Bank has released a pivotal analysis indicating that cryptocurrencies have transitioned from being hedging instruments to functioning primarily as risk assets. The Danish investment bank's research highlights a growing correlation between digital assets and traditional equity markets, a shift that has intensified since 2024. This change is attributed to increased institutional participation, evolving macroeconomic conditions, and regulatory developments. The analysis reveals that cryptocurrency movements now align closely with stock market performance, challenging the notion of digital assets as independent stores of value. Saxo Bank's data shows that ETF outflows often coincide with cryptocurrency price declines, further illustrating their response to traditional market signals. The bank advises investors to reconsider cryptocurrency allocations within their risk asset portfolios, emphasizing the importance of liquidity and correlation analysis in strategic planning. Saxo Bank's findings underscore the need for investors to adapt their strategies, treating cryptocurrencies as part of overall risk management rather than as hedging tools. This assessment reflects significant changes in market dynamics, driven by institutional adoption and regulatory clarity, which have reshaped the role of digital assets in diversified portfolios.