What influence has bitcoin had on a diversified portfolio’s risk-adjusted returns?
In this newly updated study, the Corewealth research team evaluates the historical impact of adding bitcoin to a traditional 60/40 stocks/bonds portfolio. Drawing on comprehensive data from over a decade of bitcoin returns, the study examines a wide variety of rebalancing strategies, allocation sizes, and holding periods.
The findings are remarkable.
Assuming quarterly rebalancing, bitcoin would have contributed positively to a diversified portfolio’s returns in 74% of one-year periods, 93% of two-year periods, and 100% of three-year periods since 2014. The study also highlights bitcoin’s counterintuitive influence on portfolio risk metrics and addresses three key questions investors should ask when considering a bitcoin allocation.
