Bitcoin, Ethereum and Co. are no longer pure game money. What was discussed by tech enthusiasts in forums just a few years ago has now found its way into the strategy papers of international asset managers and institutional investors. Cryptocurrencies have established themselves as a new asset class — with their own opportunities, but also with specific challenges.
The market has continued to professionalize, particularly as a result of the approval of the first Bitcoin ETFs by industry giants such as BlackRock or Fidelity. But the integration of crypto assets into traditional portfolios poses a key question for many analysts, banks and wealth managers: How do you evaluate and analyze cryptocurrencies in the context of a complete portfolio analysis?
Why cryptocurrencies are relevant as an asset class
Increasing acceptance by institutional investors: More and more asset managers are allocating shares in Bitcoin and Ethereum.
diversification: Some crypto assets show low correlation to traditional asset classes such as stocks or bonds.
Access via regulated products: ETFs and ETPs make market access easier and more regulated.
Narrative as an investment thesis:
Bitcoin as digital gold: Store of value, limited availability, inflation-resistant.
Ethereum as a technological infrastructure: Basis for DeFi, tokenization and smart contracts.
Challenges in cryptocurrency portfolio analytics
Although cryptocurrencies are playing an increasingly important role in portfolio contexts today, they are elusive from an analytical perspective. The following challenges occur regularly:
1. Volatility and risk
Crypto markets react strongly to market sentiment, political decisions, or regulatory changes.
Massive price fluctuations within a few hours are not uncommon.
Traditional risk models are only effective to a limited extent.
2. Data quality and standardization
Inconsistent market data from various exchanges.
Different price determinations depending on liquidity and trading volume.
Lack of histories compared to traditional asset classes.
3. Market structure
24/7 trading without central trading venues.
Lower liquidity with smaller coins.
No central reference index for many cryptocurrencies.
4. Lack of suitable analytics models
Most traditional tools are designed for stocks, ETFs, or bonds.
Risk and performance indicators for crypto are often completely missing or difficult to access.
Not a standard for asset allocation with crypto.
Possible approaches to crypto portfolio analytics
Despite the challenges, there are already some solutions to assess crypto assets in a more well-founded way:
Individual view of larger coins (e.g. Bitcoin & Ethereum): Focus on assets with high market capitalization and liquidity.
Develop your own indices or benchmarks: e.g. top 10 crypto index for guidance.
Integration into existing systems via interfaces: e.g. API connections to crypto exchanges for real-time data.
Develop your own risk models for crypto: adjusted to volatility, trading hours and market structure.
Multi-asset analytics with crypto: Simulations and allocation models that jointly evaluate crypto, stocks and ETFs.
However, many of these approaches fail due to a lack of technical infrastructure or provide only inadequate quantitative information.
The solution: Quantitative crypto portfolio analytics with Bavest
Bavest was the first API and infrastructure provider to create a solution that professionally and quantitatively integrates cryptocurrencies into portfolio analysis. In doing so, we are closing a gap that has so far posed significant problems for many analysts, robo-advisors and asset managers.
Our solution enables:
✓ Risk assessment of crypto assets
Calculation of classic risk indicators such as volatility, beta, value-at-risk (VaR) even for digital assets.
Comparison with traditional assets and global benchmarks
✓ Quantitative analysis with over 50 metrics
Sharpe Ratio, Alpha, Beta, Maximum Drawdown, Volatility Cluster, and many more.
Performance analysis over various periods of time.
Integration into your own dashboards or reporting systems via API.
✓ Benchmarking with the global capital market
Comparing crypto performance with common indices (e.g. MSCI World, S&P 500).
Relative strength and correlations can be analysed over time.
✓ Historical market data & price developments
Complete time series for coins such as Bitcoin, Ethereum, Solana and more
Tick data, OHLC, volume, and trading activities for backtesting.
✓ Asset allocation analysis
How does an addition of crypto affect the volatility and return of the overall portfolio?
Simulation of scenarios with different crypto shares.
✓ Mixed portfolio analysis
Combined analysis of stocks, ETFs and cryptocurrencies.
Overall performance, risk, Sharpe ratio, etc. can be calculated at portfolio level.
Consideration of diversification effects and systemic risk.
Benefits for Analysts, Wealth Managers & FinTechs
Why Bavest
Seamless integration: Our API can be integrated with existing tools, platforms, and dashboards.
scalability: Whether it's an individual portfolio or thousands of customer portfolios — our infrastructure is scalable.
Real-Time Data & Automation: Automated data updates and analyses save time and increase accuracy.
High level of transparency: All calculations are based on comprehensible models and metrics.
Future-proof: As an API-first provider, we can respond quickly to new requirements and asset classes.
Conclusion: If you take crypto seriously, you also have to analyze it correctly
The increasing integration of cryptocurrencies into mixed investment portfolios is not a short-term fad. It is an expression of structural change in the financial system. But this change requires new tools, new data, and new ways of thinking.
Bavest offers just that: An API-based platform that analyses digital assets with the same depth and precision as traditional securities. With a robust infrastructure for risk analysis, quantitative indicators and multi-asset evaluation, we are finally making crypto analysis accessible — on a professional level.
Whether you're an institutional investor, fintech, robo-advisor or asset manager: With Bavest, you can rely on a sustainable solution for tomorrow's portfolio management.
Schedule a demo now
Experience how easy and effective quantitative cryptanalysis can be. Contact our team for individual advice and an API demo.
