What's the ideal amount of crypto one should hold in their investment portfolio?
The answer is as much as you can afford to lose. However, this also depends on a number of factors such as your understanding of cryptocurrencies, the type of crypto you are investing in and your tolerance for risk.
Crypto Investment Is A Must
“You're a fool if you don’t invest in crypto assets,” told Tim Enneking, the managing director of Digital Capital Management to Forbes who further added, “you're also a fool if you invest too much.”
According to Ennerking, the optimal is 1-2% and about 5-10% for enthusiasts while above that should be reserved for true experts.
Back in 2017, Nick Maggiulli, an independent researcher had said that Bitcoin should account for only 2 percent of an “optimal portfolio” as the volatility could have a large negative impact on one’s portfolio. So, a little bit of BTC for “highly positive returns” is the solution without adding much risk to the portfolio.
Then last year, a new research paper published by a Yale University's Economics Professor, Aleh Tsyvinski said Bitcoin should be an important part of your portfolio whether you are a crypto enthusiast or not. He further said, an optimal portfolio should have 6 percent allocated to Bitcoin and who are less enthusiast, it should be 4 percent of the top cryptocurrency.
What Constitutes An Optimal Accumulation?
Earlier this month, senior analyst at eToro Mati Greenspan conducted a poll on Twitter regarding the same where 48 percent of the total 1,382 voters said “a lot” followed by “all.”
What's the ideal amount if crypto to hold in an investment portfolio?
Feel free to elaborate on your answer. Please RT for greatness.
— Mati Greenspan (@MatiGreenspan) May 1, 2019
One crypto enthusiast Crypto Flatts said: “I would say no more than 2-5% of monthly income into crypto.” While another one named Crypto Gamo added: “All, because crypto is the future.”
“During a Bull market: 25-50%. Bear market: 1-10%. Range depends on your age and everyday expenses,” said BTC John.
We have already seen the recent researches by Blockchain Capital, deVere Capital, and Fidelity Investments that indicate increasing interest from the institutional investors and High net worth individuals that are either already into crypto or planning to enter the crypto space.
The report from Blockchain Capital shared that 11 percent of the population already owns Bitcoin.
While Joe DiPasquale, CEO of crypto fund of hedge funds BitBull Capital says 0% – 5% is a good start and 3-5% allocation is the optimal accumulation per David Martin, chief investment officer at U.S. asset manager Blockforce Capital while according to Marouane Garcon, managing director of crypto-to-crypto derivatives platform Amulet, it’s 5-10%.