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Institutional Perspective

Institutional Perspective

Throughout portfolio construction, institutional investors are seeking to improve the efficiency frontiers of their portfolios. This is usually achieved through diversification into uncorrelated assets. Statistical evidence shows that incorporating a small proportion of digital assets brings significant positive portfolio effect, without material impact on the portfolio risk profile. The following stats of the most recent 7-year period highlight the impact of digital assets of a balanced 60/40 portfolio.

How representative is the 7-year timeframe of December 2012 to December 2019?

When reviewed in logarithmic scale, Bitcoin’s historic price reveals two major “crypto winters of 2013 and 2017”. Nonetheless, BTC delivered strong positive result over the cycle.