There is no doubt that Bitcoin has permanently altered the investment landscape.
Bitcoin has achieved annualised returns of 67.0% p.a. over the last 15 years [1] at the cost of similar annualised volatility. When played cautiously, Bitcoin can represent one of the best risk-reward plays for investors seeking uncorrelated alternative assets in their portfolio.
In fact, bitcoin investors have been more than compensated for the additional risk since the risk-reward ratio (Sharpe Ratio) has been around 1.35 since 2010 – higher than any other established asset class[2].
Investing into cryptoassets is rapidly becoming mainstream, as investors realise that adding a small percentage of cryptoassets to a traditional portfolio can boost portfolio returns disproportionately.
Bitwise's latest research showed that adding 5% of Bitcoin to a classical 60/40 portfolio would have boosted the average annual return to 21.9% over the period 2010 to 2025, compared to 10.6% without it, while the volatility and maximum drawdown of the portfolio did not meaningfully increase. In fact, the Sharpe Ratio increased from 0.85 (without bitcoin) to 1.51 (with bitcoin) in a multiasset portfolio with monthly rebalancing frequency. [3]
Multiasset Performance with Bitcoin (BTC)
-v1_thumb.jpg "Bitwise EU Chart Multiasset Performance with Bitcoin (BTC)-v1")
Source: Bloomberg, Bitwise Europe. Monthly rebalancing. Sharpe & Sortino Ratio was calculated with 3M USD Cash Index as assumed risk-free rate. BTC allocation is taken out of equity allocation of 60%, bond allocation remains at 40%. Past performance not indicative of future returns.
This startling outperformance of more than 10%-points was only achieved via a small strategic allocation in bitcoin with passive rebalancing – no hectic tactical trading involved. Any professional investor is aware of how hard it can be to just achieve an outperformance of a single percentage point vis-à-vis the benchmark.
Granted, bitcoin's volatility is still comparatively high. But volatility can be both good (upside) and bad (downside). The way bitcoin's volatility can be harvested and turned into an advantage is via frequent portfolio rebalancing. Bitwise's research has shown that monthly portfolio rebalancing result in the highest risk-adjusted returns for multiasset portfolios.
In the five years since the launch of the Bitwise Physical Bitcoin ETP (BTCE), the amount of bitcoins held by funds and exchange traded products (ETPs) worldwide has increased by around +392k BTC to 1.57 million BTC. [4]
The total AUM held by funds and ETPs globally has increased more than tenfold from $15.4 bn to $204.4 bn while 100s of additional cryptoasset ETPs have come to market since the launch of BTCE. [5]
At the time of writing, Bitwise holds 51,107 BTC across its Bitcoin ETPs in the US and Europe worth $5.6 billion. [6]
Bitwise: Global Bitcoin AUM (in BTC)
Source: Bloomberg, Bitwise Europe. *Includes bitcoins held in BTCE GR, BTC1 GR, and BITB US; data subject to change.
The most secure route to Bitcoin exposure
As the 2023 Trackinsight Global ETF Survey notes: “A comparative analysis of all implementation solutions available to investors to gain exposure to the spot price of cryptocurrencies shows that ETPs present the most secure and economical route…The growing appetite for ETPs over the last three years is a clear sign that there is an inherent need to protect the end investors and their assets.”
Since launching its first European crypto ETP in 2020, Bitwise has helped shape how professional investors access digital assets. BTCE was created to offer exposure to Bitcoin through a regulated and familiar investment structure. Five years on, Bitwise continues to build crypto solutions that meet the highest institutional standards-combining transparency, regulatory oversight, and operational excellence. In a rapidly evolving landscape, Bitwise ETPs offer a way for investors to thoughtfully integrate crypto into their portfolios-alongside traditional assets, and with the confidence that comes from a trusted, regulated framework.
Important Information
This publication constitutes a marketing communication and is provided for informational purposes only. It does not constitute investment advice, a personal recommendation, or an offer or solicitation to buy or sell any financial instrument.
This document (which may take the form of a presentation, press release, social media post, blog article, broadcast communication or similar instrument – collectively referred to as a “Document”) is issued by Bitwise Europe GmbH (“BEU” or the “Issuer”) and has been prepared in accordance with applicable laws and regulations, including those relating to financial promotions.
Bitwise Europe GmbH, incorporated under the laws of Germany, is the issuer of the Exchange Traded Products (“ETPs”) referenced in this Document under a base prospectus and the applicable final terms, as supplemented from time to time, approved by the German Federal Financial Supervisory Authority (BaFin). The approval of the prospectus by BaFin relates solely to the completeness, coherence and comprehensibility of the prospectus in accordance with the Prospectus Regulation and does not constitute an endorsement, recommendation or assessment of the merits of the products.
The market analyses, views and scenarios presented reflect the assessment as of the date of publication and are based on information considered reliable. However, no representation or warranty is made as to their accuracy or completeness. Forward-looking statements involve risks and uncertainties and are not guarantees of future performance. Past performance is not a reliable indicator of future results.
Capital at risk. Cryptoassets are highly volatile and involve a high degree of risk. The value of investments in cryptoassets and crypto-linked ETPs may fluctuate significantly, and investors may lose part or all of their invested capital. No capital protection or guaranteed compensation mechanism applies in respect of market losses.
Any investment decision should be made solely on the basis of the relevant base prospectus, the applicable final terms and the key information document, in particular the section entitled “Risk Warning”. The base prospectus, final terms and additional risk information are available at: www.bitwiseinvestments.eu
Access to certain documents may require self-certification regarding your jurisdiction and investor status and may be subject to additional disclaimers and important information.
For further details, please refer to the full disclaimer available at: www.bitwiseinvestments.eu/disclaimer
