My colleague @Matt_Hougan writes an excellent weekly memo, where he recently advocated for the consideration of $ETH as a technology investment akin to high growth tech plays like $NVDA and $FB.
This was the very last sentence of the memo. What does that actually look like? 👇
This was the very last sentence of the memo. What does that actually look like? 👇
The 90/10 mix of Nasdaq and Ethereum with monthly rebalance indeed generates a higher simplified Sharpe ratio across various time series. Just like $BTC adds value to a 60/40 portfolio, $ETH adds value to a modern technology portfolio. The 1-year total return chart shows you how.
But is 90/10 the right mix, or are there alternative allocations? For long-term minded investors, it might pay to allocate more to ETH! With a 70/30 Index over 3.5 year, you can almost triple your NDX-only return, with only a ~50% increase of volatility.
If it's hard to believe this, it's likely because you haven't been paying attention to the recent decoupling of crypto/equities correlation. Hopefully, the below shows that clearly. In fact, the 90D correlation vs NDX dipped below 10% for most of the first 2 months of the year.
TLDR: there's two takeaways!
1) ETH can be a valuable diversifier to a modern technology portfolio, and should be considered for its empirical merits in a liquid portfolio
2) Always make sure to finish Matt's memo! You never know what he'll drop on the few last sentences... :)
1) ETH can be a valuable diversifier to a modern technology portfolio, and should be considered for its empirical merits in a liquid portfolio
2) Always make sure to finish Matt's memo! You never know what he'll drop on the few last sentences... :)
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