Bitwise CIO: Investors should rethink Bitcoin's role in traditional portfolios and avoid adding Bitcoin separately

PANews
PANews
BTC+1.16%

PANews reported on June 4 that according to The Block, Bitwise Chief Investment Officer Matt Hougan advised investors to rethink the role of Bitcoin in traditional portfolios. He pointed out that while bitcoin is highly volatile (3-4 times that of the S&P 500), due to its low correlation with stocks and bonds, adding 5% bitcoin to the traditional 60/40 stock-bond portfolio (2017-2024) can increase total returns from 107% to 207%, while volatility only slightly increases from 11.3% to 12.5%. Hougan stressed that the allocation of bitcoin should not be isolated from each other, but should be adjusted in conjunction with the overall risk budget - for example, adding 5% of short-term Treasury bonds while allocating 5% of bitcoin can theoretically reduce equity risk. Historical data shows that a combination of 40% equity, 50% bond, and 10% Bitcoin can deliver higher returns and lower risk. But he also cautioned that Bitcoin's early returns may not be sustainable, and future performance may be different.

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