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Bitcoin’s (BTC’s) outsized price gains are well established. BTC has posted average annualized returns of 60% over the past 10 years, and is leading all major asset classes again over the past year, +119%.

Lesser known is the fact that bitcoin’s worst four year return over its entire 15+ year history is a 22.9% compounded annualized return, multiples more than any other liquid asset class. There is also growing awareness of bitcoin’s ability to act as a safe haven in downturns as BlackRock shared last month, summarized here.

But concerns remain about bitcoin being too risky, too volatile.

This report is the first in a three-part series that debunks these concerns with evidence addressing:

• • Part I: Bitcoin’s migration from a speculative opportunity to an investment imperative for institutions due in part to its uniquely favorable volatility and return profiles.
  • Part II: How adopting bitcoin is in keeping with the Registered Investment Advisors (RIAs) heritage of disrupting the asset management business for client benefit (Q4 2024 release).
  • Part III: Structural tailwinds on the global macro front supporting bitcoin adoption including mounting sovereign debt and deficits that stand in stark contrast to bitcoin’s codified cap on supply (Q4 2024 release).

This first installment is an empirical study of bitcoin’s ability to enhance both absolute and risk-adjusted returns for an otherwise traditional 60% equity / 40% bond portfolio (60/40). Since the 60/40 remains a core benchmark for the asset management industry, institutions are likely incentivized to beat the absolute and risk-adjusted returns of the 60/40.