Bitcoin and crypto: CONSOB report is in: OK coming back, but with too much risk

Consob on Crypto and Bitcoin: Only slightly higher returns despite high risks.

CONSOB, the Italian supervisory body for stock exchanges and markets, published a second report dedicated to it Major trends in sustainable investing and cryptoassets. Being an authority of this importance, it will be necessary to carefully evaluate what is contained in this document, which, as is always the case when expressing opinions about cryptocurrencies, will be CONSOB source of important discussions.

The premise is necessary: ​​as reported by CONSOB, the content of the report is an expression of the author’s personal opinion and does not bind the agency in any way. But what is written? Let’s look at it together.

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A new CONSOB report on cryptocurrencies and Bitcoin is coming

That’s another reports which CONSOB produces based on investments in crypto assets, that is the formula that now seems to be official for the Italian authorities. And there are some interesting data, starting with the percentage of the total population that owns this property.

The percentage of the population that owns crypto assets.

Italy does not seem to be doing very well: it is behind Portugal, the Netherlands, Poland, Spain, Germany, the United Kingdom and France, which is also in this round the country that seems to be the most active in this type of investment. But that is not the only interesting thing in the report.

There is a long line of data about reserves from the so-called stable coinsas well as consumption Bitcoin mining and other data that could be at least partially recovered elsewhere. Perhaps more interesting is CONSOB’s press release which takes some of the information from the report:

As of September 2023, the annual return of Bitcoin (which together with Ether represents more than 60% of the cryptocurrency market value) was only slightly higher than that of other non-digital asset categories, despite the much higher risk due to extreme price volatility.

It is not clear what kind of data CONSOB used to draw these conclusions: YTD Bitcoin is up a whopping +124%, compared to growth of less than 20% FTSE MIB and growth – where present – which is unlikely to be higher than for other indices and other stock exchanges. The same applies to interesting yields on bonds, which are light years away from those of Bitcoin AND Ethereum.

There is absolutely no doubt about the fact that these are high-risk assumptions. But here, it seems, the discussion is not well framed at least in terms of the choice of useful words. If it is 100% of additional yield is a little higherwe have no standards for making more intelligent assessments of the performance of these assets.

Even taking what the report offers at face value and thus the return calculation per month, we have 2.7% for Bitcoin, 2.2% for Eurostoxx, 1.6% for SPX, 1.1% for oil. Not exactly slightly higher returns, if calculated on a monthly basis, although this calculation may actually seem inaccurate to many for assessing the impact of BTC investing on one’s portfolio.

Full report

Full report is available here and will not fail to trigger the usual debates, perhaps prompted more by a particular press release than by what is indicated in the report itself.

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