A new research carried out by the top exchange in the world, Binance, shows that portfolios that include Bitcoin exhibit overall better risk-return profiles compared to the traditional multi-asset class portfolios. The Binance Research study was carried out recently, analyzing different portfolio structures in order to ascertain the differences in risk-return profiles.
Binance is in the latest cryptocurrency news for stating the details of the study as following:
“#Binance Research analysis shows that including $BTC in traditional multi-asset class portfolios provides overall better risk-return profiles.”
The full study can be seen on this link.
Portfolio Management Series #1 – Diversification Benefits with #Bitcoin#Binance Research analysis shows that including $BTC in traditional multi-asset class portfolios provides overall better risk-return profiles.
How much of your portfolio is Bitcoin?https://t.co/s8MFE42sfl
— Binance Research (@BinanceResearch) July 25, 2019
The Binance Research study also concluded that for a decade, Bitcoin has been an extremely volatile asset that exhibited a lot of drawdowns. Conversely, it has also had some of the largest price rallies in history. Plus, there has been no correlation between BTC and other traditional asset classes such as commodities, equities and fixed-income products.
Right now, Bitcoin has a number of advantages from a trading perspective. It is listed by many best cryptocurrency news sites as one of the most liquid assets on the planet. The Binance Research study also scratched the surface of this topic, adding the following:
“Binance Research simulated different Bitcoin allocation techniques in existing diversified multi-asset portfolios. All simulated portfolios which included Bitcoin exhibited overall better risk-return profiles than traditional multi-asset class portfolios. These results show that Bitcoin provides active diversification benefits for all investors worldwide, following multi-asset strategies.”
As we can see, the new institutionally focused investment products and crypto custody solutions are what made Bitcoin an essential asset that will be included in any portfolio for its diversification properties.
Plus, it is no surprise that BTC was declared highly volatile with annual returns in four figures for three of the ten years that it exists. The Binance Research study also explores this and shows that volatility is likely to decrease as the industry matures and new institutional products (ETFs, mutual funds etc) are launched.
This Binance Research study was the first report in a series on portfolio management Irrespective of the preferred asset class, BTC was found to provide diversification benefits which led to an improved risk-return profile.
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