Bloomberg analyst says Bitcoin fails as portfolio asset

Mike McGlone, a senior analyst at Bloomberg, stated that digital assets have underperformed the Nasdaq index on a risk-adjusted basis over the past decade, labeling them as a failed asset for portfolio and risk management. The MarketVector Digital Assets 100 Index (MVDA) has exhibited about three times the volatility of the Nasdaq-100 Index (NDX) since 2017, yet its relative returns have remained largely flat. While higher volatility could typically be mitigated through portfolio diversification, digital assets have shown a positive correlation with equities, offering minimal benefits for risk management. The MVDA index, which is approximately 67% weighted in Bitcoin, has not outperformed the Nasdaq since the introduction of Bitcoin futures by CBOE and CME in 2017. McGlone noted that significant bullish factors, such as the approval of spot Bitcoin ETFs and the pro-crypto policies of the Trump administration, have already been largely priced in, hindering the potential for digital assets to achieve strong excess returns over traditional assets in the future.

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