The data from January 2024 onwards indicates that the recent trend of “altcoin trading” is essentially synonymous with stock trading. In the same period, the S&P 500 saw a return of about 25% in 2024 and 17.5% in 2025, totaling to around 47% over two years. Similarly, the Nasdaq-100 had gains of 25.9% and 18.1% over the same timeframe, resulting in a cumulative increase of nearly 49%.
On the other hand, the CoinDesk 80 Index, which monitors the next 80 crypto assets after the top 20, experienced a significant decline of 46.4% in the first quarter of 2025 and was down approximately 38% year-to-date by mid-July. The MarketVector Digital Assets 100 Small-Cap Index also dropped to its lowest point since November 2020 by late 2025, wiping out over $1 trillion from the total crypto market cap.
The divergence between crypto and stock performance was stark. While US stock indices delivered double-digit gains with controlled drawdowns, broad altcoin baskets showed negative returns with volatility matching or surpassing equities.
The question for investors in Bitcoin was whether branching out into smaller crypto assets provided any risk-adjusted advantage or simply exposed them to a negative Sharpe ratio while maintaining correlation with equities.
For the analysis, three altcoin indices were tracked: the CoinDesk 80 Index, the MarketVector Digital Assets 100 Small-Cap Index, and Kaiko’s Small-Cap Index. These indices provided a range from broad alt baskets to high-beta micro-caps to a quantitative research perspective, all reflecting a similar story of underperformance compared to US equity indices.
Overall, the data suggests that holding US equities or major cryptocurrencies like Bitcoin and Ethereum offered better risk-adjusted returns compared to broad altcoin indices. The liquidity in the altcoin market was seen consolidating in a select few “institutional-grade” names, indicating a shift towards quality over quantity.
In conclusion, the performance data from 2024 and 2025 indicates that broad altcoin indices failed to provide diversification benefits or outperform US equities, highlighting the importance of strategic allocation in the evolving landscape of cryptocurrency trading.
