Bitcoin: Unlocking the Digital Asset Allocation World

Joy Yang

February 17, 2021

In 2009, Satoshi Nakamoto created Bitcoin and unlocked a new investment asset class. The transition of cryptoassets from their early form as money-like medium of exchange to investable investment assets are beginning to take on wider acceptance.

And digital assets, as an investment vehicle, are beginning to take on broader scope as we see traditional assets like equities, bonds and commodities become tokenized and represented in digital form. Having more choices for asset allocation is critical to constructing targeted investment solutions. Choosing the correct asset allocation is one of the most important decisions that investors make.

The MVIS CryptoCompare Institutional Bitcoin Index (MVIBTC) measures the performance of a digital asset portfolio which invests in Bitcoin, with prices being taken from selected exchanges. Using MVIBTC as a proxy for BitCoin and cryptoassets, we see that it has been the top performing asset class in five out of the last seven years.

These dynamics mean that Bitcoin and cryptoassets, in general, are set to grow in usage across both the passive index space as well as in the more active allocation space. Perhaps, in turn, this will trigger the digitalization of asset allocation strategies.

Welcome to the Digital World!

Note: Bitcoin (BTC) price hits $50,000 for the first time on 16 Februrary 2021.