Bitcoin in your portfolio? Here’s why 5.77% is the optimal allocation according to experts

Bitcoin holds steady above $101,000 on Friday, with nearly 5% gains in the past seven days. 

Bitcoin’s (BTC) all-time high above $104,000 early in December, was followed by investors rushing to add the cryptocurrency to their portfolio. While asset management giants and institutions add Bitcoin to their holdings, in its recent report BlackRock suggested investing up to 2% of a multi-asset portfolio in Bitcoin. 

Analysts at 10x Research believe the number is higher, 5.77% for a multi-asset portfolio, based on their 2025 forward projections for Bitcoin price. 

Experts recommend allocating 5.77% to Bitcoin, based on 2025 expectations

10x Research published a report listing the factors that could help determine the optimal Bitcoin allocation in a multi-asset portfolio. In their report, experts consider the following three factors:

• How is Bitcoin expected to perform relative to equities
• How will equities perform relative to bonds?
• And what is the target portfolio's overall volatility?

Based on their 2025 projection for Bitcoin price relative to the performance of US equities, experts recommended a 5.77% allocation to the largest cryptocurrency. BlackRock recommended an upper cap of 2%, suggesting that it represents a reasonable range and produces risk similar to the Magnificent Seven, a group of megacap tech stocks. 

Experts recommend a forward-looking strategy when determining the right allocation to Bitcoin, instead of one where correlation is drawn between global money supply liquidity. 

Historically, Bitcoin bull markets, irrespective of their correlation with Gold or money supply, succumb to regulatory pressure. Experts argue that this risk has been mitigated with the approval of US Spot Bitcoin ETFs. 

The downside risk associated with prolonged bear markets and steep correction in BTC price has systematically reduced, per 10x Research’s assessment, building a strong case for inclusion of Bitcoin in multi-asset portfolios. 

Over relatively long time periods, Bitcoin's return drivers have demonstrated little correlation with other asset classes, and introducing BTC could result in portfolio diversification and optimization for investors. 

At the time of writing, Bitcoin holds steady above $101,000 on Friday.