Bloomberg senior analyst Mike McGlone argued that Bitcoin and other cryptocurrencies may be classified as underperforming assets when viewed through the lens of risk and portfolio management over roughly the past decade. In his assessment, the Market Vector Digital Assets 100 Index, or MVDA, which is about two-thirds weighted to Bitcoin, has been largely flat since 2017, while the Nasdaq 100 Index has continued to rise over the same period. McGlone said MVDA has shown average volatility about three times higher than the Nasdaq 100 and has remained positively correlated with equities, which in his view means it has failed to deliver effective diversification. He also said that after Bitcoin futures launched in 2017 and crypto entered the mainstream, MVDA stopped outperforming the Nasdaq 100. McGlone added that the listing of U.S. ETFs and Donald Trump’s shift in stance ahead of the 2024 presidential election may already have marked crypto’s peak, and he does not expect that situation to change.
Bloomberg senior analyst Mike McGlone said Bitcoin and other cryptocurrencies may be considered underperforming assets over roughly the past decade from a risk and portfolio management perspective.
MVDA has been mostly flat since 2017
McGlone wrote that the Market Vector Digital Assets 100 Index, or MVDA, which is about two-thirds composed of Bitcoin, has been largely flat since 2017. Over the same stretch, the Nasdaq 100 Index, or NDX, kept moving higher.
He said MVDA’s average volatility has been about three times that of the Nasdaq 100, while also showing a positive correlation with equities. In his view, that means the index has not provided effective diversification, leaving its performance weak when judged through a risk and portfolio management framework.
He says crypto’s peak may already have passed
According to McGlone, crypto entered the mainstream after Bitcoin futures launched in 2017, and MVDA no longer outperformed NDX after that point. He added that the listing of U.S. ETFs and Donald Trump’s change in stance ahead of the 2024 presidential election may already have marked the peak moment for cryptocurrencies, and that this setup is unlikely to change.
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