Portfolios Weighted By Market Cap

Three index portfolios — the top 5, 10, and 20 tracked assets, weighted by market cap and rebalanced monthly — against simply holding Bitcoin, all indexed to 100 at the start of 2019.

The uncomfortable finding this chart usually delivers: broad diversification into alts has mostly underperformed just holding BTC across full cycles, because alt drawdowns are deeper than their rallies are higher. Diversification earns its keep only in the alt-season windows — which the gap between the lines makes visible.