Crypto Long & Short: Putting the bitcoin sizing question to the test

Hi readers,

Welcome to our institutional newsletter, Crypto Long & Short. This week:

• In a follow-up to his essay on sizing crypto risk, Gregory Mall of Lionsoul Global backtests bitcoin in a 60/40, asking not what to own, but how much you can survive holding.
• Top headlines institutions should pay attention to by Francisco Rodrigues
• “MetaDAO surpasses $45 million raised as platform traction drives 46% META rally” in Chart of the Week

CoinDesk will be attending the Digital Asset Yield Summit in Singapore on October 6th. This is an invite only private capital conference focused on digital assets. Learn more if you are interested in joining us at the event!

Thanks for joining us!

– Kim Klemballa

Holding rules: what allocators should know about adding bitcoin to a balanced portfolio

by Gregory Mall, chief investment officer, Lionsoul Global

This is part two of Gregory Mall’s case that crypto allocation’s real question is size, not selection. You can read part one here.

Investors who treat crypto as too speculative to touch tend to frame the decision as binary. The more practical framing concerns dosage and implementation: how much bitcoin a balanced portfolio can carry and under what rule it should be held.

We tested this directly. Starting from a conventional 60/40 portfolio of global equities and core bonds, we introduced spot bitcoin at 2.5% and 10% weights with monthly rebalancing across January 2021 to March 2026. The headline results are intuitive. Adding bitcoin lifted returns and Sharpe ratios (a standard measure of return relative to risk) in strong crypto years, while the traditional core cushioned weaker ones. A small sleeve changed the shape of outcomes while leaving the portfolio’s 60/40 identity intact. Higher weights also brought more volatility and deeper maximum drawdown, and that trade sits at the heart of the sizing question.

We then repeated the exercise with a rules-based trend sleeve in place of spot bitcoin, one that toggles between bitcoin and cash on trend signals. This is the same logic behind systematic tools like the CoinDesk Bitcoin Trend Indicator, which signals the direction and strength of bitcoin momentum from CoinDesk Data. The trend version moderated extreme years in both directions. It landed between the plain 60/40 and the spot mix on risk and return, improving drawdown behavior at the cost of some upside.