Key facts:
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Ethereum could reach above $20,000 by 2030, according to VanEck.
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VanEck sets out what it considers the portfolio that offers “best risk-adjusted returns.”
VanEck, a financial asset management firm, determined the optimal bitcoin (BTC) and ether (ETH) allocation percentage that — in its opinion — an investment portfolio should possess to maximize risk-adjusted returns.
In the analysis prepared by Matthew Sigel, Patrick Bush and Denis Zinoviev, all possible combinations are derived to maximize the sharpe ratio, a measure used to evaluate the performance of an investment in relation to the risk assumed.
This is how the experts came to the following conclusion:
“The analysis revealed that the ideal allocation was 71.4% bitcoin and 28.6% ether. This setup returned the highest Sharpe ratio, indicating the best risk-adjusted performance for an all-cryptocurrency portfolio. The findings underscored the need for investors to hold both assets to maximize profits. The naive allocation of 50% BTC and 50% ETH also demonstrated substantial advantages, reinforcing the value of diversification within the cryptocurrency class.”
Matthew Sigel, Patrick Bush and Denis Zinoviev, analysts at the firm VanEck.
As can be seen in the graph, this portfolio allocation had a volatility of 0.89%, a high compound annual growth (CAGR) of 1.32% and a ratio of 1.43%.
The analysis further reflects that adding a modest cryptocurrency allocation (up to 6%) to a traditional portfolio composed of 60% stocks and 40% can improve risk-adjusted returns.
To evaluate the trade-offs between risk and return, 16 representative 60/40 portfolios were analyzed with incremental increases in cryptocurrency allocation, up to the same maximum of 6%.
Below, the chart reflects the trade-off between risk and return when adding BTC and ETH to a traditional portfolio:
In this regard, the specialists add that “investors should consider their individual risk tolerance, but the data suggests that a balanced inclusion of BTC and ETH can offer enormous benefits in terms of improved performance relative to the incremental risk introduced. “The findings highlight the potential of cryptocurrencies to improve portfolio performance in a controlled and measurable way.”
VanEck: Ethereum will reach $22,000 in an average scenario
The financial giant updated its projections for the price of ETH and in the long term predicts that its price will be $22,000 in 2030, in a base scenario.
As Criptonoticias already reported, the optimism in this forecast is based on the ecosystem technology created by Vitalik Buterin to offer greater efficiency and transparency, compared to credit cards or payment methods such as PayPal. Specialists define it this way:
Ether is a novel asset that exposes investors to a high-growth, internet-native trading system called Ethereum that threatens to disrupt existing financial businesses and the platforms of big tech companies like Google and Apple.
Matthew Sigel, Patrick Bush and Denis Zinoviev, analysts at the firm VanEck.
One of the reasons that would drive the listing of ETH is the approval of spot ETFs by the United States Securities and Exchange Commission (SEC). VanEck is one of the issuing companies that has already submitted the corresponding documentation for the funds to be listed on the market.
Finally, the predictions published in the report also project the price of ETH in a bullish scenario, at $154,000 in 2030, and in a bearish scenario, at $360..
