The performance gap between cryptocurrencies and global stocks: risk factors become key

Bloomberg Intelligence senior commodities strategist Mike McGlone recently pointed out that after risk adjustment, the investment returns of cryptocurrencies are significantly inferior to those of the global stock market, which may suggest that the upward cycle of risk assets is weakening.

Seven years, comparable returns but vastly different risks

According to Bloomberg Galaxy Crypto Index data, from the end of 2017 to December 30, the cumulative increase in cryptocurrencies was about 90%. This performance seems comparable to the growth in the global stock market’s total market capitalization, but the issue is—the costs are entirely different.

During the same period, the annual volatility of cryptocurrencies was about seven times higher than that of the global stock market. In other words, investors need to endure much higher risks and psychological pressure to achieve similar returns.

Risk-adjusted returns are the real deal

This is the core point Mike McGlone wants to convey: it’s not just about absolute returns, but also about “value for money.” When cryptocurrencies use greater volatility to exchange for the same returns as the stock market, from a risk management perspective, this trade-off is actually not cost-effective.

This phenomenon sends a noteworthy signal—that the strong cycle of risk assets may be losing momentum. For investors seeking stable returns, these data warrant deep reflection.