Tips for Implementing Bitcoin in Portfolios

Bitcoin is still a teenager. Initially, the largest cryptocurrency was widely viewed as a highly speculative asset most appropriate for risk-tolerant, short-term traders. Now, however, many see that it merits consideration in traditional portfolios.

The notion that bitcoin can be included in standard investment portfolios earned further ballast earlier this year when the Securities and Exchange Commission (SEC) approved spot bitcoin ETFs. Registered investment advisors (RIAs) and wealth management firms are among the adopters of those products. That’s confirmation professional asset allocators see merit in bitcoin and view it as an appropriate part of some client portfolios.

Increased advisor usage of bitcoin is a good segue into the merits of overall crypto inclusion in portfolios. Beyond bitcoin, ether, and a few other of the largest digital currencies, the crypto universe has many potentially overly risky, low use case coins. There are 10,077 digital tokens on the market today and the number of viable investment ideas from that group is likely measured in tenths of a percent.

Important Points About Bitcoin in Portfolios

Many people associate bitcoin with jaw-dropping declines and rallies. Some of that reputation could be shed as it matures. Still, the reality is that cryptocurrency isn’t for the faint of heart. Advisors and investors need to acknowledge as much prior to getting involved.