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Investment Exec: Crypto Market Gets a B+ for 2018


Aaron Brown — AQR’s former Chief Risk Manager and an author on risk management and gambling-related topics gave crypto markets’ 2018 performance a “B+ grade” in an op-ed for Bloomberg, Dec. 20.

Aaron Brown pointed out Bitcoin’s (BTC) 80 percent fall from its $20,000 one year ago mirrored peaks and falls in previous years, namely in 2011 and 2013.

Brown outlined the fact that Bitcoin’s decline this year has actually been relatively milder than the rapid drop its saw after its peak in 2011. The 2018 sell-off has, however, still been sharper than the one in 2013, the author noted.

Furthermore, Brown describes that in 2011 BTC hit a bottom in less than a year after its peak, and continued to recover in less than two years. Similarly, In 2013 BTC didn’t recover for two years, taking a further four years until its next peak.

Brown also looks at the 2000 boom and bust of the Nasdaq composite index which took 15 years to fully recover:

“Cryptocurrencies might stay low for a very long time, or go to zero and stay there forever, but recoveries from crashes are common.”  

In conclusion, Brown expressed optimism about the “technical solution” provided by cryptocurrencies, stating that he is confident crypto is “here to stay.”

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