Returns haven't kept up with the risks; the current rally in crypto assets may be coming to a halt.

ZkProofPudding · 2026-01-19T09:15:55+00:00

Bloomberg Intelligence analysis indicates that, in terms of risk-reward ratio, cryptocurrencies underperform global stocks, suggesting that the upward phase of risk assets may be nearing its end. Although cryptocurrencies have risen by 90%, their volatility is seven times higher, and risk-adjusted returns are poor, indicating that the market may have reached a turning point.

ZkProofPudding

2026-01-19 09:15:55

Abstract generation in progress

According to Bloomberg Intelligence commodity strategist analysis, there is a phenomenon worth noting: from the perspective of risk-reward ratio, crypto assets actually underperform compared to global stocks. This may be sending a signal — the rapid rise phase of this cycle of risk assets is approaching its end.

Data comparison is a bit awkward

Let’s look at specific numbers. From the end of 2017 to December 30, the Bloomberg Galaxy Crypto Index (BGCI) increased by about 90%, which sounds impressive. But when compared to the total market capitalization growth of global stocks, that 90% increase is actually about the same — not outperforming the market.

Where is the problem? Volatility. During the same period, the annual volatility of crypto assets was about 7 times higher than that of global stocks. In other words, to earn this 90%, you paid the price of enduring 7 times the risk volatility.

What does this mean

In investment terms, this is called poor risk-adjusted performance. Simply put: the cost paid did not bring equivalent returns.

In traditional finance, this phenomenon usually appears when an asset class is entering a decline or has limited room for further gains. Comparing this to the current crypto market, it may indicate that this cycle of rapid risk asset growth has reached a turning point.

Although the subsequent trend depends on market performance, this signal is worth serious consideration by traders and holders.

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