Favorites from the BOLD Chartbook
Charles Morris ByteTree Asset Management put together a chart book for BOLD. I had a casual video meeting with Charlie where we explained these charts. The recording is published on the Vinter Podcast. In this post, I will show you my favorite BOLD graphs from this book.
The financial product BOLD is tracking the Vinter ByteTree BOLD1 Index. Every chart you will see relies on backtested data for the BOLD1 index. The exchange-traded product BOLD was listed on the Swiss stock exchange in April 2022. To make a meaningful analysis going back 1–5 years, we cannot use actual price data on BOLD, instead, we need to use backtested data.
BOLD1 outperformed stocks
BOLD1 has outperformed all major stock markets. No matter if you go back one year or three years or five years, the BOLD1 index has outperformed stocks. (With “major” we mean: the US, Japan, Europe, Emerging markets, and even the Swiss safe haven.)
BOLD1 is an inflation hedge
When the inflation expectations go up, so does BOLD1. This makes BOLD1 a good inflation hedge. (The 10-year breakeven rate serves as an indication of the market’s inflation expectations over the 10-year horizon.)
BOLD1 goes up when the market is scared
In late 2019, the VIX spiked up and the credit spreads widened–the market was scared. In this scary period, the BOLD1 index outperformed the global stock market.
In the first chart, the red line is the VIX index measures fear in the market. When the VIX goes up, the market is scared.
In the second chart, the red line is the credit spread for American companies (credit spreads widen when it is more likely companies will fail to pay their debt). When credit spreads go up, the market is scared.
In both charts, the black line consists of how much BOLD1 outperformed the world’s stock market. (We use the MSCI World Index which is a standard benchmark for the world’s stock market.)
By looking at these two graphs together, we can see that when the market is scared BOLD performs better than the stock market.
Lastly, there is another chart I like a lot, which demonstrates that the BOLD1 index is not volatile. Blending bitcoin and gold brings the volatility down to levels below stocks. You can find it in this post:
