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The Optimal Long-Term Portfolio Share of Bitcoin Is Negative (Or Zero)

2 pointsby Bostonian21 days ago

2 comments

slwvx21 days ago
From the last section, &quot;Implications&quot;, we read<p>&gt; The lower long-run return of cryptocurrencies, relative to equities, is inherent to the asset class, because cryptocurrencies do not generate any cash flows.<p>Ether and other proof-of-stake coins can generate income through staking: <a href="https:&#x2F;&#x2F;www.thestreet.com&#x2F;crypto&#x2F;markets&#x2F;fidelitys-ethereum-etf-seeks-secs-permission-for-staking" rel="nofollow">https:&#x2F;&#x2F;www.thestreet.com&#x2F;crypto&#x2F;markets&#x2F;fidelitys-ethereum-...</a>
Bostonian21 days ago
Table 1 shows that from 2020 through Feb 2025, Bitcoin daily returns have had a standard deviation of 4.06%, vs. 1.32% for the S&amp;P 500, and its correlation to the S&amp;P has been 0.38. The high volatility and positive correlation make it unattractive for people who are long stocks.