Bitcoin Only Represents 0.7% of The Global Multi-Asset Market Portfolio
Equities have the largest share of almost 41%, followed by government bonds, yields on which have been plunging over the years, in some instances going negative.
Bitcoin price climbed to a new all-time high of nearly $62,000 this weekend which has made the leading cryptocurrency a $1.1 trillion market cap asset.
Despite having grown more than 13x from its March lows, the crypto asset only accounts for a mere 0.7% of the global multi-asset market portfolio. Even gold accounts for 2% of this portfolio based on the precious metal held for investment and not all the gold that has been mined.
Equities have the largest share of almost 41%. One of the most commonly followed equity indices is the S&P 500 hit a new ATH last week at 3,952, up just 5% YTD. In comparison, the leading cryptocurrency has rallied 95% this year so far.
Denominated in BTC, S&P is down 99% over the last five years. Bitcoin is simply the best performing asset of not only this year but of the last decade.
Interestingly, the second-largest share in the global multi-asset market portfolio is of government bonds which have been plunging over the years, with some even into negative territory.
The yield on the benchmark 10-year US Treasury note has fallen to 1.625% today from above 5% in early 2007. The yield on the 30-year Treasury bond has also dipped to 2.382% from nearly 10% in 1987.
In Portugal, Germany, France, and the Netherlands, the yields have gone subzero.
— jeroen blokland (@jsblokland) March 13, 2021
Bitcoin gains have been the result of the crypto asset emerging as the hedge against the inflation and weaker fiat currencies all over the world as ever since last year; central banks started printing money to combat the effect of coronavirus pandemic. Richard Byworth, CEO of Diginex Ltd., a Nasdaq-listed digital asset financial services company in an interview with Bloomberg noted,
“What we're seeing is a massive monetary stimulus against the devaluation of the dollar. And that is having a push effect onto Bitcoin, which is already having a supply-side crisis due to the halving.”
“Starting to see some of the bond guys get involved in this space. And this is quite critical. I mean, they've obviously been looking at 20 years of trillions of dollars of negatively yielding paper, and they're looking around trying to see how does this paradigm shift and starting to look at Bitcoin and understand how this is actually a better store of value than gold.”
Byworth predicts BTC reaching $175k by the end of this year as more and more corporations, institutions, macro hedge fund managers, and others adopt Bitcoin.