Webinar Replay: Benchmarking Digital Asset Funds
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Benchmarking Digital Asset Funds: Are Managers Measuring Performance Effectively?
As digital assets continue to institutionalize, one issue consistently emerges across allocator and manager discussions: There is no standardized way to measure performance.
In traditional markets, benchmarking frameworks are well established. In digital assets, they are still developing. This gap is directly influencing how strategies are evaluated and how capital is allocated.
In this session, Crypto Insights Group convened S&P Dow Jones Indices, Syncracy Capital, and Amitis Capital to discuss how benchmarking is being applied in practice and where the challenges remain.
Watch the Replay Here
Key Takeaways
Benchmark alignment remains a core challenge
Benchmark mismatch is common across digital asset strategies. Many managers operate across specific segments of the market, yet performance is often assessed against broad proxies that do not reflect their actual exposure.
As noted in the discussion, over 60 percent of managers cite identifying an appropriate benchmark as their primary challenge, followed by gaining allocator acceptance of that benchmark .
Without alignment between strategy and benchmark, it becomes difficult to isolate the drivers of performance.
Bitcoin serves as a reference point, but not a complete benchmark
Bitcoin remains the default comparison point for many allocators. It is accessible, widely understood, and increasingly available through low-cost vehicles.
However, its role is limited. Much of the broader digital asset market exhibits characteristics more comparable to equity or venture exposure, while Bitcoin functions more as a macro asset.
Direct comparisons can therefore distort performance assessment, particularly for strategies with little or no Bitcoin exposure.
There is no single market benchmark
Unlike equities, digital assets do not have a widely accepted equivalent to the S&P 500. Allocators apply different frameworks depending on their objectives and level of sophistication.
Common approaches include:
- Benchmarking against Bitcoin as a baseline
- Comparing performance across major assets such as Ethereum or Solana
- Using broader indices to approximate altcoin exposure
- Applying multiple benchmarks to assess performance from different perspectives
This lack of standardization reinforces that benchmarking remains contextual.
Alpha depends on the benchmark definition
From an allocator perspective, alpha can only be evaluated relative to a clearly defined benchmark.
As access to beta improves through ETFs and other passive vehicles, the threshold for active management increases. Allocators are increasingly focused on whether managers are delivering returns that exceed what can be achieved through passive exposure.
This places greater emphasis on transparency in how performance is measured.
The asset class requires segmentation
Digital assets represent a broad and evolving set of exposures, including store of value, infrastructure, decentralized finance, and application-layer themes.
A single benchmark cannot capture these differences. As a result, benchmarking is moving toward a more segmented approach, where strategies are evaluated within the context of their specific opportunity set.
Index construction is a key variable
Even when benchmarks are used, their construction materially impacts outcomes.
Considerations include:
- Weighting methodology, such as market cap or equal weight
- Inclusion criteria for assets
- Treatment of smaller or lower-quality tokens
- Changes in market composition over time
Unlike traditional markets, there are limited structural barriers to entry for digital assets, which introduces additional complexity in defining representative indices.
Benchmarking will evolve with the market
Benchmarking frameworks are developing alongside the asset class. Market structure, new investment themes, and changing participation all influence how performance is measured.
Different market environments can significantly alter the perception of outperformance, reinforcing the need for consistency and clarity in benchmark selection.
Implications for Allocators
Benchmarking is becoming a central component of the investment process.
Allocators are increasingly:
- Evaluating strategies based on underlying exposures rather than headline returns
- Using multiple reference points to assess performance
- Separating market-driven returns from manager skill
- Assessing whether active strategies justify their cost relative to passive alternatives
Conclusion
Benchmarking in digital assets remains an evolving discipline.
There is no single framework that applies across all strategies. However, there is a clear direction toward greater structure, improved alignment between strategy and benchmark, and more rigorous performance attribution.
As institutional participation increases, benchmarking will play a defining role in how capital is allocated and how managers are evaluated.
About the Session
Title: Benchmarking Digital Asset Funds: Are Managers Measuring Performance Effectively?
Duration: 43 minutes
Participants:
- Crypto Insights Group
- S&P Dow Jones Indices
- Syncracy Capital
- Amitis Capital
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If you are evaluating digital asset strategies or refining your benchmarking framework, we are happy to share how allocators are approaching this in practice.
