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.

Asset Class Returns (USD)

Source: Novel Investor, MVIS

MVIS CryptoCompare Institutional Bitcoin Index


Source: MV Index Solutions GmbH.  All values are rebased to 1000. Data as of 16 February 2021.

About the Author:

Joy Yang is Global Head of Index Product Management at MV Index Solutions (MVIS). She is responsible for managing MVIS products and services to accelerate innovation in financial index design and adoption. Joy brings more than 25 years of investment experience to MVIS, having led teams delivering index and quantitative-active investment solutions at Arabesque Asset Management, Dimensional Fund Advisors, Vanguard, Aberdeen Standard Investments, AXA Rosenberg and Blackrock. Joy has an MBA from the University of Chicago Booth School of Business, and a BS in Electrical Engineering from Cooper Union’s Albert Nerken School of Engineering.

The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.