BlackRock, the largest asset manager in the world, has published a study that suggests actively including bitcoin in traditional investment portfolios. Based on the use of preferences to achieve positive asymmetry, the article suggests that the optimal distribution of bitcoin in an investment portfolio consisting of 60% stocks and 40% bonds should be an impressive 84.9%.
BlackRock researchers analyzed bitcoin's performance and profitability from July 2010 to December 2021 and found that bitcoin is characterized by high volatility of 132% per year. The positive asymmetry stands out especially when it comes to continuous accumulated profits.
Significant attention was drawn to the third central point of bitcoin's profitability, which amounted to 144% per year. This is significantly different from the -0.43% and 0.01% percentages observed in stock and bond yields, respectively.
The researchers also noted that the profitability of bitcoin has a constant tendency to significant profits. Basically, it corresponds to general patterns, but occasionally exceptional moments arise, which they call "bliss mode". During such periods, bitcoin prices rise more than 100 times a year.
This positive asymmetry attracts investors who are looking for significant profits and motivates them to add large amounts of bitcoin to their investment portfolios.
Interestingly, even with the expected depreciation of bitcoin in standard scenarios, investors aiming to maximize profits usually allocate 3% to bitcoin. This distribution remains relevant even when the probability of a high-yield scenario is only 1%.
This recommendation from BlackRock differs from traditional financial institutions, which often take cautious positions regarding cryptocurrencies.
