Investors have varied definitions of success, but no one can argue the significance of beating benchmarks such as the S&P 500. Since the index leveled off at 500 companies in 1957, the average annual return hovers around 8%. All investors consider beating the S&P 500 a massive win, especially if you can do so consistently.
The blockchain industry has yet to adopt an index that tracks the growth of the overall crypto landscape, but many investors see bitcoin as the leading indicator. As such, Bitcoin Market Journal has constructed a portfolio optimization tool to help you beat Bitcoin!
The model provides two separate portfolios, one with ten digital assets and the other with three. The model takes historical pricing into account to determine the optimal weights for each digital asset. If done correctly, investors can use historical data to predict the probability of beating Bitcoin returns on a daily, weekly, and yearly basis.
To help with setting up your optimal portfolio, BMJ has included detailed instructions throughout the rest of the article.
It’s no secret that some of the top performing digital assets have little to do with bitcoin. Scores of altcoins have realized incredible gains in the past few years, surpassing even the most notable assets on the market.
The five coin portfolio uses historical price data from Ether (ETH), Ripple (XRP), Monero (XMR), Litecoin (LTC), and NEM (XEM) to demonstrate those impressive gains in comparison to bitcoin over the last few years.
An evenly weighted five coin portfolio, for example, would produce 3.5x the return of an all bitcoin portfolio, according to our historical data range of approximately three years.
Analyzing and experimenting with the evenly weighted portfolio is the first step in the process. Investors should prioritize their asset allocations based on personal investment goals. The portfolio optimizer can help by using historical pricing to establish trends and…