BlackRock conducted a study assessing the level of risk that individual and corporate Bitcoin investors may face when investing in the first cryptocurrency or traditional assets.
BlackRock analysts came to the conclusion that Bitcoin, with its high volatility, belongs to the class of risky assets. However, most of the risk factors and potential returns that Bitcoin investors face are fundamentally different from traditional stock market risk assets.
Despite the volatility and speculative nature of digital currencies, BlackRock suggests including Bitcoin in traditional investment portfolios with a 1-2% allocation. The company’s experts said that the risk profile of an investment portfolio that includes Bitcoin is comparable to the risk profile of a traditional portfolio that includes securities of technology giants Apple, Amazon or Nvidia.
At the same time, Bitcoin, as a scarce, non-sovereign and decentralized global asset, has a low value correlation compared to traditional stock market assets. Which, according to BlackRock analysts, allows us to consider military-technical cooperation as one of the options for hedging risks in times of galloping inflation and significant political events.
Earlier, a similar proposal was made by the founder of Interactive Brokers Group, Thomas Peterffy. The businessman recommended that investors set aside 2-3% of their portfolio for Bitcoin in order to diversify their investments without being exposed to the risks of cryptocurrency volatility.
Source: Bits
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