Crypto's Lackluster Performance Raises Questions About Its Worth

The MarketVector Digital Assets 100 Index (MVDA), which tracks 100 digital assets weighted by market capitalization, has been relatively flat since its launch in October 2017. This is despite Bitcoin accounting for roughly two-thirds of the index and delivering spectacular rallies since then.

Bloomberg Intelligence strategist Mike McGlone notes that the MVDA has experienced about three times as much volatility as the Nasdaq-100 during this period, without offering a sustained performance advantage.

McGlone estimates that an investor who held the MVDA from its launch point would have endured larger swings than an investor in the Nasdaq-100 without receiving superior returns. He argues that crypto's positive correlation with growth stocks has limited its value as a diversifier.

The strategist suggests that regulated Bitcoin futures, US spot Bitcoin exchange-traded products, and a friendlier political climate may have already provided crypto with its strongest catalysts, making it harder for the asset class to repeat outsized gains.