Passive crypto investing: introducing crypto ETFs and small cap premium

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Passive crypto investing: introducing crypto ETFs and small cap premium (90 downloads)

Author: Katula Lamperouge

Keywords: passive investing, crypto ETF construction, cap weighted, equal weighted, small cap premium.

Abstract: Passive investing outperforms active investing in the stock market, as is witnessed by the famous 1-million dollar bet between Warren Buffett and an active fund manager over the course of ten years. If we apply passive investing on the top 20 capitalized cryptos consistently, cap weighted or equal weighted, excess return is to be expected out of small cap premium. This is the first and strong indication that cryptos qualify as financial instruments, and with multiple additional advantages, arguably superior to the traditional underlyings like stocks.

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