Investors Embrace Gold-Bitcoin Portfolio as Bitcoin Trading Volume Rises


Portfolio management is all about managing risk. While it is not possible to completely avoid risk, an investor who is risk-averse would not want to take any. Instead, such an investor would aim for higher risk-adjusted returns. As such, investors build portfolios with a combination of different assets, in order to get the best possible returns. The ideal combination would be assets that have a negative correlation, which would result in diversification benefits.

However, it is also possible to build a portfolio with correlated assets. While the risk increases, some other benefits may entice risk-tolerant investors. As the average daily trading volume of Bitcoin rises, a portfolio with both gold and Bitcoin makes sense. Gold is traditionally known for its stability, while the addition of Bitcoin provides exposure to the cryptocurrency’s upside potential.

Why should you add gold and Bitcoin to your portfolio? Diversification is key to spreading risk. A portfolio manager’s challenge is to find the right combination of assets, so that diversification brings the maximum benefits. By combining gold and Bitcoin, investors may participate in the cryptocurrency’s upside potential while also mitigating the risk associated with Bitcoin’s volatility.

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