As of writing, Bitcoin just topped $65k to hit an all-time high…
As the ProShares Bitcoin Strategy ETF (BITO) launches this week, there has been a plethora of speculation about bitcoin hitting its all time high. Our IDX Risk-Managed Bitcoin Index, however, hit an all-time-high last week (and again today)…how is this possible? It comes back to the idea of capital efficiency. If the drawdowns are less frequent and more shallow, then your capital doesn’t need to work nearly as hard to get back to (and eventually past) all time highs.
Investors tend to get dollar signs in their eyes when it comes to bitcoin…and for good reason. But return is only part of the story (and the less important part)…the risk that had to be taken to get that return is the most important component for long-term success. Our favorite way to measure this is simply comparing severity and duration of drawdowns between two time series…continue reading
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