How Much Bitcoin Should Be in your Portfolio?

By Derek Moore

March 18, 2021

On a recent internal ZEGA call, a few of us remarked how we have gotten some questions from clients around whether or not they should buy Bitcoin. While ZEGA does not have a position nor use it In our hedged equity portfolios, a recent Kiplinger article hinted at potentially 0.50%. You can click on the article to get more detail on how they came up with it.

But in general, this exploratory piece would seem to line up with ZEGA’s CEO Jay Pestrichelli’s book Buy and Hedge where he talked about having the majority of assets in a core hedge strategy to put a material floor in you portfolio. At the same time, thinking about your investment pie chart, a small slice might be allocated to your inner guru. You know, the piece for where you might use your own ideas or explore an area of instruments.

Now I do not pretend to know where Bitcoin is heading. I also know that it has been very volatile in its price movement. Considering several -80% drawdowns that have already happened. But if you have been hearing about it from your neighbors, this piece referenced above might be an interesting angle for you to check out.

Otherwise for the majority of assets, just be hedged!