Odaily Planet Daily News BlackRock said in a previous asset allocation study that Bitcoin is an independent investable asset that may bring about changes to investors seeking to maximize returns.
The study, conducted in April 2022, shows that for a 60-40 portfolio (60% stocks and 40% bonds) with a fixed risk aversion of γ = 1.50, the optimal allocation to BTC is 84.9%. The remaining 15.1% is recommended for allocation to stocks and bonds.
According to the Sharpe ratio (a measure of excess return per unit of investment risk), adding bitcoin to a portfolio can significantly boost its risk-adjusted return. The Sharpe ratio for the 60-40 portfolio excluding Bitcoin was 0.72, compared to 1.53 for the portfolio allocated 84.9% Bitcoin. (Bitcoin Archive)