Analysing performance of digital assets: BNB-based allocation trumps Bitcoin-based portfolio

Portfolio Management in the digital asset industry has picked up pace in the financial industry over the past couple of years.

A recent collaborative report between 21Shares and Binance Research identified the performance of traditional US equity and fixed-income portfolios, with and without the involvement of digital assets.

According to the report, portfolio optimization with BNB was also a major point of discussion.

The characteristics of BNB were highlighted in the report as it was one of the lowest correlated assets with other digital assets and it also incurred a low correlation index with traditional financial assets in 2019.

The report went forward with two general approaches for the construction of the portfolio: Results based Time-Rebalancing and those based on Tolerance-based Rebalancing. With regard to the former, it was reported that Binance token portfolio indicated a high level of volatility in comparison to the BTC+BNB portfolio but the excessive volatility was largely compensated because BNB outperformed both the benchmark portfolio with crypto and the BNB+BTC portfolio.

When one looks at the tolerance rebalancing approach, one finds that the BNB portfolio performed better in this regard as well with both the benchmark and the BNB+BTC portfolios playing second fiddle in terms of profit returns.

The report added that the analysis suggested a tolerance-rebalancing strategy exhibited a more reliable way for an investor to ensure their portfolios are never unnecessarily over-exposed to the crypto-asset industry.

A report by Bitwise Asset Management earlier this year stated that more than half of the financial advisors suggested against cryptocurrency investments. A survey was conducted within 415 top financial advisors in the United States and even though they admitted that 90% of their clients had queried about crypto investments in 2019, the advisors strictly remained against the investment and believed that regulatory uncertainty was a major red flag in this decision.

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Cult Today

Cult Today

CULT is a collective for NFT lovers. We are passionate NFT hoarders, we love minting our own collections and we are always on the lookout for collaborations. Most of our work can be found on StakeCube Marketplace

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