AMSTERDAM, 20 March 2025 – The adoption of cryptocurrencies has followed an unconventional path, with retail investors and crypto-native communities initially taking the lead. Institutional investors were initially held back by challenges such as regulatory uncertainty, market volatility, and a lack of proven custodial infrastructure. However, this situation is evolving. 

This whitepaper from Amdax and Bolder explores the incorporation of Bitcoin and ether into traditional investment portfolios. It highlights the potential of cryptocurrencies for enhanced diversification and higher expected returns. 

The whitepaper analyzes the historical performance, correlations, and risk-reward scenarios of adding cryptocurrencies to a traditional U.S. 60/40 portfolio over the period from January 1, 2018, to February 1, 2025. The analysis demonstrates that adding a small allocation to crypto can enhance portfolio performance. Although the portfolio with crypto experienced larger losses in certain periods (particularly during bear markets), it resulted in a clear outperformance over the entire analysis period. 

A key factor contributing to this outperformance is the relatively low correlation between bitcoin and ether on one hand, and stocks and bonds on the other. This makes cryptocurrencies interesting diversifiers, leading to less portfolio volatility compared to adding assets with a higher correlation. 

The analysis identifies an optimal cryptocurrency allocation of 15% based on the Sharpe ratio. Additionally, a volatility scaling strategy is presented as a method to manage the increased risk of crypto while achieving attractive returns. 

“Our analysis demonstrates that even a small allocation to crypto can lead to enhanced portfolio performance and improved diversification due to their relatively low correlation with traditional assets” said Jan Muizelaar (Head of Sales at Amdax). “This aligns with the growing institutional recognition of crypto’s potential as a strategic asset for long-term growth.” 

“The study’s findings on optimizing crypto allocation for risk-adjusted returns and the potential of volatility scaling strategies underscore the need for sophisticated approaches”, said Devin Schoor (Digital Asset Analyst at Bolder Group). “Bolder’s experience in governance and compliance, combined with Amdax’s secure custody solutions, empowers fund managers to confidently navigate this evolving financial landscape and capitalize on the benefits highlighted in our research.” 

About Amdax: Amdax is a leading Dutch crypto service provider known for its strong focus on regulation and compliance. As the first crypto company registered with De Nederlandsche Bank (DNB) in 2020, Amdax offers institutional-grade security for trading and storing digital assets. 

About Bolder Group: Bolder Group has been a trusted partner in fund administration since 2000, serving clients in the traditional financial sector. With over two decades of experience in institutional alternative investments, Bolder has now established a strong foothold in the digital asset space. 

The full whitepaper is available for download at White Paper: Institutional Adoption of Crypto (Bolder X Amdax)

Contacts: 

Devin Schoor
Digital Asset Analyst
⁠devin.schoor@boldergroup.com
+31 33 467 3880

Danny Oosterveer
Head of Digital Marketing at Amdax
danny@amdax.com
+31636174838