Gregory Mall of Lionsoul Global has released a backtest showing that how you hold bitcoin in a portfolio can be as important as how much you hold. The analysis tested a 60/40 portfolio across bull, bear, and sideways markets, comparing a straight bitcoin position, a large-cap basket, and a trend-managed sleeve.
The three strategies tested
Mall's backtest pitted three approaches against each other. The first was a simple buy-and-hold of bitcoin. The second used a basket of large-cap cryptocurrencies. The third applied a trend-following rule to manage exposure. Each was slotted into the crypto portion of a traditional 60/40 stock-bond portfolio.
The test ran through three distinct market regimes: a bull market, a bear market, and a sideways market. The exact dates and duration weren't disclosed, but the goal was to see which holding method performed best in each environment.
What the numbers said
The results varied sharply by regime. In the bull market, the straight bitcoin position delivered the highest returns — no surprise there. But in the bear market, that same position took the biggest hit. The trend-managed sleeve, by contrast, cut losses significantly during the downturn. In the sideways market, the large-cap basket held up better than the other two.
The key takeaway: no single method dominated across all conditions. The best approach depended on the market environment. That's the core of Mall's argument — the method of holding bitcoin matters as much as the allocation size.
Most crypto allocation discussions focus on the percentage of bitcoin in a portfolio. Mall's work suggests that's only half the equation. A 5% allocation in a trend-managed sleeve might outperform a 10% allocation held outright during a bear market. The same logic applies in reverse during a bull run.
For advisors and institutional allocators, this adds a layer of complexity. It's not just about how much crypto to own, but how to own it. The backtest doesn't recommend one strategy over another — it shows that the choice has real consequences.
The full methodology is available on Lionsoul Global's website. Mall said the firm plans to expand the analysis to include other asset classes and rebalancing frequencies.
