How Much Bitcoin Should You Hold In Your Portfolio?

Is Bitcoin A Worthwhile Asset To Add To Your Portfolio?

Image of a bitcoin

Reuters

Image of a bitcoin

Murray NEB.––With the rise in popularity of cryptocurrency, many people are wondering how much they should set aside in their own portfolio. The crypto market is no doubt an eye-catching place. However, there are many risky factors involved with crypto.

Fidelity Head of Director of Global Macro, Jurrien Timmer, believes that bitcoin might be a wiser investment compared to gold. Timmer said, “Bitcoin is a legitimate store of value, is scarcer than gold, and comes complete with a potentially exponential demand dynamic.” Timmer also points out that bitcoin has a hedge on inflation. While bitcoin sounds like the perfect investment it also comes with the risk of extreme volatility and policy intervention.

Many traditional investors advocate that 60% of your investments should be put into stocks and 40% should be invested in federal and corporate bonds. Although there is nothing wrong with this strategy, Ark Invest CEO Cathie Wood thinks otherwise. Wood stated, “You think about the traditional 60/40 stock-bond portfolio, but look what’s happening to bonds right now,” She then added. “If we are ending a 40-year secular decline in interest rates, that asset class has done its thing. What’s next? We think crypto could be the solution.”

Bitcoin is a great consideration to add to your portfolio. With newer generations starting to invest cryptos will and have been picking up traction. However, if you are a conservative investor, I would not recommend investing in bitcoin. If you want little exposure to cryptos, I recommend investing 2-3% of your portfolio into bitcoin.