How Much Bitcoin Do You REALLY Need?
Probably more than you think, but not an impossible amount
I think about this a lot.
How much of this new asset class do I really need in my portfolio? It’s an interesting question to ponder, especially now that I have a few decades (!) worth of wealth accumulation behind me. How much is enough?
Now, before we go forward—when looking at my investments in a detailed way, I consider Bitcoin itself to be separate from altcoins and other cryptocurrencies. The fundamentals are different, and so is the risk. You might disagree with that assessment, but that’s how I see it.
So, how much $BTC do I plan to eventually own?
The answer is five percent of my total investments.
That’s a nice, clear, concise number, and one that makes sure I’m not overinvested in what is admittedly still a very risky endeavor. Bitcoin’s price endures wild swings, and I don’t want to expose myself to too much of the downside that comes with that momentum.
So… five percent is doable.
I’m not the only one who sees it this way. Billionaire Paul Tudor Jones told the world last year that he has five percent allocation in the asset. A Yale study from 2019 recommended six percent for every portfolio, with a four percent exposure for those feeling conservative. Other money managers also tend to agree with this rule of five percent.
Do I foresee a time when I might invest a higher percentage into Bitcoin? Sure—especially if the asset enters an era of expanded adoption and more stable pricing. I’m open to doubling or tripling that five percent. But for now, I’m sticking to that metric. It helps me create a roadmap for how to handle Bitcoin against my other assets.
What about you? Do you like the idea of five percent? Are you investing more? Or are you investing less?
Plus, this week on The Crypto Connection’s Twitter Space…
JT and I welcomed Chris Swenor to our Monday night conversation! Chris is the co-founder of Humble Swap, Game Jam, and several other emerging projects. Chris participated in a great “ask me anything” session, and the conversation focused on NFTs, blockchain gaming, and how he believes this emerging asset sector can change our lives.
I’m happy to say that 74 people participated in this week’s conversation.
As always, we recorded the conversation, and its good for 30 days. To listen in, just click on the link below!
The Crypto Connection is for entertainment purposes only and is not meant to be financial advice. Please do your own research before investing in any asset class. Sara Celi is not a financial advisor, and holds several cryptocurrencies. To purchase her books on Amazon, please click here.