Gregory Mall from Lionsoul Global revisits the topic of crypto risk sizing by backtesting bitcoin allocations within a 60/40 portfolio across various market conditions, revealing the significance of both the amount and method of holding bitcoin.
By Gregory Mall|Edited by Kim Greenberg Klemballa Aug 5, 2026, 3:03 p.m. 5 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on SummaryShowYou're reading Crypto Long & Short, our weekly newsletter featuring insights, news, and analysis for the professional investor. Sign up here to receive it every Wednesday.
Note: The opinions expressed in this column belong to the author and do not necessarily represent those of CoinDesk, Inc., CoinDesk Indices, or its affiliates.
Hello readers,
Welcome to this week's edition of Crypto Long & Short. Highlights include:
- In a continuation of his exploration of crypto risk sizing, Gregory Mall of Lionsoul Global performs backtests on bitcoin within a 60/40 portfolio, focusing on the survivability of different holding amounts.
- Key news for institutional investors by Francisco Rodrigues
- “MetaDAO raises over $45 million as platform momentum drives a 46% rise in META” featured in Chart of the Week
CoinDesk will be present at the Digital Asset Yield Summit in Singapore on October 6th. This exclusive event is focused on digital assets. Learn more if you'd like to attend!
Thank you for being with us!
- Kim Klemballa
Guidelines for Holding: Insights for Bitcoin Allocation in Balanced Portfolios
by Gregory Mall, chief investment officer, Lionsoul Global
This article continues Gregory Mall’s argument that the core issue in crypto allocation is size rather than selection. You can read the first part here.
Investors often perceive crypto as too speculative, leading to binary decision-making. A more pragmatic approach focuses on dosage and implementation: determining the appropriate bitcoin allocation for a balanced portfolio and the rules governing that allocation.
To investigate, we began with a standard 60/40 portfolio composed of global equities and core bonds, introducing bitcoin at weights of 2.5% and 10% with monthly rebalancing from January 2021 to March 2026. The results were straightforward. Incorporating bitcoin enhanced returns and Sharpe ratios (a common measure of return relative to risk) during strong crypto years, while the traditional core mitigated losses in weaker years. A minor allocation altered the portfolio's outcome without changing its 60/40 structure. However, higher allocations increased volatility and maximized drawdowns, which is central to the sizing dilemma.
We also replicated this analysis using a trend-based sleeve instead of spot bitcoin, which shifts between bitcoin and cash based on trend signals. This mirrors systematic tools like the CoinDesk Bitcoin Trend Indicator, which assesses bitcoin momentum. The trend approach moderated extreme market conditions in both directions, landing between the traditional 60/40 and the spot mix in terms of risk and return, improving drawdown behavior at the expense of some upside.
Insights from Market Regimes
Analyzing performance across bull, bear, and sideways markets using the 200-day moving average clarifies the situation. During bull markets, both strategies outperformed the standard 60/40, with the trend approach capturing much of the upside along a more stable path. In bear markets, the divergence was significant. Direct bitcoin exposure amplified the crypto drawdown's impact on the overall portfolio, while the trend sleeve, designed to avoid prolonged downtrends, minimized losses and made the experience more manageable.
Sideways markets, often overlooked, warrant attention. These range-bound conditions, characterized by price fluctuations without clear direction, do not reward strong convictions nor provide timely rebounds. In such scenarios, direct bitcoin exposure struggled to justify its volatility, while the trend-based sleeve had a better chance of avoiding risks without corresponding rewards. Portfolios frequently navigate these uncertain and indecisive phases.
Looking Ahead
Three structural factors will influence how these strategies unfold. The post-ETF market is increasingly sensitive to flows, meaning demand shocks can quickly escalate and intensify both trends and reversals. Supply growth is constrained by the 2024 halving, which will continue to shrink. Regulatory clarity across key jurisdictions is distinguishing viable projects from speculative ones, raising the demand for transparent benchmarks and institutional-quality offerings.
The accompanying charts illustrate the risk profile of each allocation strategy. They do not aim to predict future cycles. Portfolios that perform well in terms of returns can still become unappealing when drawdowns become intolerable, while steadier portfolios often yield better long-term results because investors remain committed to them. Risk is as much about experience as it is about measurement. For asset allocators, the critical question is the holding rule that governs bitcoin exposure and whether it prevents emotional responses from undermining discipline when it matters most.
Weekly News Highlights
This week’s news indicates that institutions are increasingly involved in crypto trading, even as the push for regulatory clarity in the U.S. has stalled. Nevertheless, major Wall Street firms are advocating for progress.
- Institutional crypto trading reaches a record 72% as Wall Street reshapes the market: Institutions accounted for 72% of spot volume on Wintermute’s OTC desk in the first half of the year, up from approximately 61% in the latter half of 2025, as retail participation decreased.
- Wall Street leaders support the Clarity Act as the Senate window closes: Major firms including BlackRock, Fidelity, Franklin Templeton, Goldman Sachs, and SoFi endorsed this market-structure bill, but Senate leaders later confirmed it would not be discussed before the summer recess.
- BlackRock launches tokenized access to $311 billion of European money-market funds: The asset manager introduced 12 tokenized share classes across six funds and 15 markets using JPMorgan’s Kinexys blockchain platform.
- BNY seeks to penetrate the $8.6 trillion transfer-agency market using blockchain: The bank is implementing an on-chain ownership ledger for a business managing $8.6 trillion across 7.6 million accounts, later partnering with Galaxy to integrate staking into its custody platform.
- First U.S. spot bitcoin ETF to shut down as inflows decline: Hashdex will liquidate its $14.7 million DEFI fund after August 17 as assets and inflows remain concentrated in products managed by BlackRock and Fidelity.
Chart of the Week
MetaDAO raises over $45 million as platform growth leads to a 46% META rally
MetaDAO has raised over $45 million, with $5.4 million generated in July alone. This increasing adoption aligns with strong market performance, with $META up 46% month-to-date.
Listen. Read. Watch. Engage.
Listen: “Wall Street giants support a $15M initiative to secure Bitcoin against quantum threats as the CLARITY Act approaches a critical deadline,” on CoinDesk’s Public Keys from the floor of the NYSE. Jennifer Sanasie hosts a discussion with Charles Schwab Head of Crypto Research Jim Ferraioli, Galaxy Head of Firmwide Research Alex Thorn, and FalconX Head of Derivatives Griffin Sears.
Read: In Crypto for Advisors, Aaron Brogan of Brogan Law PLLC discusses the shortcomings of the Clarity Act. In “Ask an Expert,” Trevor Koverko provides insights on the bill’s potential implications.
Watch: “BNY transitions $8.6T fund operations to blockchain,” featuring Jennifer Sanasie on CoinDesk Daily.
Engage: CoinDesk Research has released the July 2026 Stablecoins & Tokenized Assets Report, titled "Tokenized RWA Hits $32.1B Record as MiCA Era Begins and Stablecoin Market Dips.”
For more updates, visit coindesk.com for the latest crypto news and market insights from coindesk.com/institutions.
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The Evolution of the Crypto CEX Landscape: A Case Study on Binance
The Evolution of the Crypto CEX Landscape: A Case Study on Binance
Binance remains the leading exchange in crypto, expanding from spot and derivatives into RWAs, payments, savings, yield, and broader financial services.
By CoinDesk ResearchJun 29, 2026Commissioned byBinanceBinance continues to dominate as the leading crypto exchange, broadening its offerings from spot and derivatives to RWAs, payments, savings, yield, and comprehensive financial services.
Why it matters:
Binance's status as the leading exchange shows its ongoing expansion and influence in the crypto space.
View Full ReportMore From CoinDesk Indices