Analysts from CryptoResearch published a study in which they talked about various investment strategies. They noted that in this landscape, the integration of digital assets, including Bitcoin (BTC), into traditional portfolios has generated significant interest and discussion among investors. Experts conducted a portfolio management analysis and looked at the impact of including a flagship cryptocurrency with a modest 2.5% stake.
The experts explained that they examined potential changes in the overall performance and volatility of a traditional investment portfolio over the decade from January 1, 2014 to November 2023. The study aims to provide information on how to optimally integrate BTC into diversified investment strategies while balancing the tradeoff between maximizing returns and controlling volatility.
“No other rebalancing returned 178% compared to the non-BTC portfolio, which returned 75%. However, different strategies can reduce risk, especially when combined with uncorrelated assets.. Historically, the best Bitcoin rebalancing frequency has been annual (143%), then quarterly (111%), and finally monthly (97%). Essentially, this shows that optimal results were achieved when the digital asset was held in the portfolio for as long as possible,” the researchers emphasized.
Experts noted that a traditional portfolio without Bitcoin showed higher volatility than with a BTC allocation of 2.5% and monthly, quarterly or annual rebalancing. Thus, a conservative approach to cryptocurrencies should include a clear allocation of the flagship digital asset. Let us remind you that as of the evening of April 19, 2024, the cost of the BTC cryptocurrency is $64,155.
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