Analyzing the Best Approach for Passive Crypto Investment: Crypto Long & Short

Market capitalization-weighted indexes have long been the preferred choice for passive investors in stocks. These indexes are rooted in the principles of Modern Portfolio Theory and have been the industry standard since the introduction of the first index fund in 1975. However, in 1992, Eugene Fama and Kenneth French developed a three-factor model that provided a better explanation for stock returns. This model incorporated small-market caps and low price-to-book ratios as additional systematic risk factors, supplementing the traditional beta factor.