Diversifying Crypto Assets Improves Returns, Study Finds

Diversification improves returns for a given level of risk, a core principle of finance theory that crypto currently overlooks

Owning a single asset confuses optimal portfolio construction with desired risk level, leading to suboptimal outcomes

Bitcoin-only and Ethereum-only crypto portfolios from 2018-present had high returns but poor risk-adjusted returns

An equal-weighted Bitcoin + Ethereum portfolio improved risk-adjusted returns over Bitcoin or Ethereum alone

Further diversifying into a portfolio of the top 10 crypto assets improved returns without increasing volatility