A Bloomberg analyst, stating that the expectation of a decline in Bitcoin continues, argues that Bitcoin has failed as a portfolio asset.
Bloomberg Intelligence senior commodities strategist Mike McGlone stated in a post on his X account that the performance of Bitcoin and other crypto assets in terms of portfolio management over the last decade or so should be questioned.
At this point, McGlone argued that digital assets have underperformed the Nasdaq-100 index on a risk-adjusted basis over the past decade, making Bitcoin a “failing” asset in terms of portfolio and risk management.
Higher Risk, Limited Additional Reward!
According to McGlone’s assessment, the MarketVector Digital Assets 100 Index (MVDA), in which Bitcoin makes up approximately two-thirds, has lagged behind the Nasdaq-100 Index (NDX) since 2017.
One of the key points McGlone highlighted at this stage was volatility. The analyst noted that the MarketVector Digital Assets 100 Index (MVDA) has shown approximately three times more volatility than the Nasdaq-100 Index (NDX) since 2017, but that this higher volatility and risk haven’t resulted in a significant additional return in the long run compared to the Nasdaq-100.
McGlone interpreted this chart as indicating that crypto assets performed poorly in terms of risk and portfolio management.
Another element of McGlone’s analysis was the correlation between crypto assets and stocks. According to the analyst, high volatility could contribute to portfolio diversification due to the negative correlation with stocks. However, the positive correlation between digital assets and stocks did not provide a practical benefit for risk management. McGlone argues that this limits Bitcoin’s ability to function as a risk-reducing tool independent of traditional assets.
The MVDA index, in which Bitcoin has approximately 67% weighting, has lagged behind the Nasdaq-100 since cryptocurrencies entered the regulatory framework with the launch of CBOE and CME Bitcoin futures in 2017. According to the analyst, the MVDA’s superior performance against the Nasdaq-100 also ended after this period.
McGlone added that significant bullish catalysts, including the approval of spot Bitcoin ETFs and the pro-cryptocurrency policy of the Donald Trump administration, are largely already priced in, making it difficult for crypto assets to deliver uniquely strong returns compared to traditional assets in the future.
