The short answer is that there is no right answer. Each investor must evaluate how aggressive they want to be.
Factors that impact this decision may include:
- how much you can save
- your time horizon, and
- your willingness to bear risk that your crypto will decrease in value.
To illustrate this last point, a CFA Institute Research Foundation report suggested a 2.5% allocation to Bitcoin (between January 2014 and September 2020) improved returns from a traditional portfolio by nearly 24%. In this time frame, Bitcoin’s price grew 2,875%. However, if you had added the same amount of Bitcoin in December 2020, the impact through July 2022 would have been ~0%. Ultimately, past results are not guarantees of future performance.
This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.
