A well-diversified portfolio can include more than just stocks and bonds. Thanks to the ubiquity of exchange-traded funds (ETFs), it's now remarkably easy to add just about any asset class to your portfolio mix, and that includes cryptocurrency. When investors talk about adding cryptocurrency to their portfolio, they're really talking about adding Bitcoin (CRYPTO: BTC).
That's because Bitcoin accounts for a whopping 60% of the total value of the crypto market. There are now nearly a dozen spot Bitcoin ETFs available for trading, so adding Bitcoin to a portfolio mix is usually just a click away. This Rare Signal Is Flashing Again.
In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Most investors recognize Bitcoin for its extraordinary upside potential.
After all, it has grown exponentially in price. A decade ago, a single Bitcoin cost $575. Today, that same Bitcoin is worth $64,000.
But there's another side to Bitcoin: diversification. Throughout its history, Bitcoin has been largely uncorrelated with major asset classes, making it attractive as a potential hedge. It can zig when other assets zag.
So, for example, if the equity market is down for the year, Bitcoin can still post gains. This is more than just conjecture. Back in September 2024, asset management giant BlackRock (NYSE: BLK) released a paper called "Bitcoin: A Unique Diversifier." It started off by showing how Bitcoin has been largely uncorrelated with any major asset class for the better part of the past decade.
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