A professor at Yale University thinks everyone needs to own bitcoin.
According to an article released a few months back, professor Aleh Tsyvinski thinks that the perfect risk adjusted portfolio needs to include an allocation to bitcoin.
This is coming on the heels of my post yesterday where I said that at some point just about all the big macro funds will hold at least a little bit of bitcoin.
That can be seen here:
Why should everyone hold bitcoin?
According to Tsyvinksi, he did some research modeling some portfolios holding different assets and different asset classes...
His findings were that due to the asymmetrical potential for returns with bitcoin, it needs to be owned.
His findings showed that a 4% allocation was ideal, though for those that were slightly less risk averse, a 6% allocation could be practical as well.
More about his findings can be found here:
https://bitcoinist.com/new-yale-study-every-portfolio-must-include-at-least-6-bitcoin/
So, basically his thesis is due to the large percentage gains bitcoin has enjoined since its inception.
Novogratz agrees on the allocation, but for a different reason.
As I mentioned in my post yesterday, Novogratz thinks that bitcoin is a perfect gold proxy.
It should be owned in place of, or along with, gold as a portfolio hedge against market uncertainty at an allocation of at least 1%.
Novogratz used to manage a very large macro fund on Wall Street and likely still has many contacts/friends in the industry...
Which means, him saying that he thinks many funds will start an allocation to bitcoin carries more weight than most who would say this...
There you have it folks, bitcoin needs to be owned anywhere from 1%-6% due to the potential for asymmetrical returns as well as it's properties as digital gold.
Eventually this is going to catch on with many of the major funds.
Stay informed my friends.
Image Source:
https://bitcoinist.com/new-yale-study-every-portfolio-must-include-at-least-6-bitcoin/
Follow me: @jrcornel
Going to send him a mail saying my portfolio is only cryptos xD Owning stocks is harder than owning cryptos, a lot of boreucratic BS with stocks, while with cryptos there is none of the BS, no taxes in my country! Nothing!
I might diversify in the future, but only after the market crashes hard (which should happen in the next 5 years), probably student loans defaulting
When they say portfolio, they are not just talking stocks. They are talking any investment you might hold. Stocks, mutual funds, gold/precious metals, commodities, bonds, annuities all might make up an investing portfolio...
Pretty much the same case here. Currently, cryptocurrencies are the only type of investments I'm involved in. I agree, traditional stocks involve too much bureaucracy, and generally need to act through some broker, who may probably not be working in my best interests.
Not investing in stocks (though usually done through a fund as opposed to stock picking) has been a huge mistake by people for the last 100 years. That may change going forward, but they still make a lot of sense in retirement portfolios.
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STOPTick, tick, tick...
Once we start going back up again, they will probably jump in.
I await enthusiastically 😎👍
Hoping it happens sooner rather than later.
Yep... it’s been a brutal 12 months
..my portfolio currently stands a 485 steem., and zero anything else - how much BTC do I need to buy? lol
This is mainly talking about a well diversified portfolio. IE one that holds stocks, commodities, bonds, precious metals, annuities, real-estate, etc etc.
Enough that you can buy more Steem when the exchange rate is favorable... Then sell some of the Steem when the exchange rate is high enough. That's how I do it...
Wait until the fiat currencies they hold start to devalue due to the debt bubble! Then we will see the flock towards store of value like bitcoin!
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What is going to cause that debt bubble to collapse? With the dollar being the world's reserve currency and the fact that the US has given money to so many countries, part of me doesn't think the debt bubble is really as big of a deal as people make it out to be. They may just wipe the slate at some point and tell everyone else to deal with it.
I think when the growing economic population start to have more buying power and realize how it will be manipulated based on a currency not in their control. The likes of China, India and Brazil are key examples that could set the tone to pressure the debt by no longer buying it or even selling it for other assets.
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Yeah. Thats when Bitcoin will exit the bear market into full bull market. :)
If that is what we are waiting on, it's going to be a long wait...
I def agree, gotta stay in that top percentile lol We are still so early. Great article.