HomeFinance NewsFinanceCrypto: The Spicy Investment That'll Leave Your Portfolio Sizzling!

Crypto: The Spicy Investment That’ll Leave Your Portfolio Sizzling!


Crypto is ‘like cayenne pepper’ for investors, money manager says: ‘A little goes a long way’


When investing in cryptocurrencies like Bitcoin, experts recommend allocating a small percentage of your portfolio to manage the risks associated with their volatility.

Similar to adding a small amount of cayenne pepper to a dish, a modest allocation of 2% to 3% of your portfolio is considered sufficient.

This allocation is based on the understanding that even a small exposure to crypto’s high volatility can potentially have a significant impact compared to traditional assets.

The appropriate allocation also depends on your risk tolerance and financial situation.

Younger investors with a longer investment horizon can afford to allocate a higher percentage, perhaps 5% to 7%, while older investors with limited risk exposure may only want to invest 1% or less.

It’s important to note that cryptocurrencies are highly speculative and can experience extreme price fluctuations.

Bitcoin’s wild ride in recent years, with rapid gains and steep declines, highlights the volatility associated with these assets.

For those considering investing in crypto, experts recommend using dollar-cost averaging, which involves investing a small amount regularly rather than making a lump sum purchase.

This strategy can help reduce the impact of market volatility.

Additionally, periodic rebalancing may be necessary to maintain your desired asset allocation as crypto prices fluctuate.

  • Overall sentiment: neutral
  • Positive

    “Allocating just 2% to 3% of a portfolio to cryptocurrency like bitcoin is “more than enough,” according to one certified financial planner.”

    “Crypto prices have been on a wild ride lately.Bitcoin, for example, surged to an all-time high earlier in March.”


    “Crypto is an incredibly volatile asset, experts said.”

    “Bitcoin prices had collapsed heading into 2022, and shed about 64% that year to below $20,000.”

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