Should You Invest In Bitcoin In 2025?
Bitcoin (BTCUSD) has had a spectacular run this year, rising to over $100,000, and some analysts expect it to go even higher next year. While that may tempt you into considering investing in it, financial advisors remain cautious about recommending the cryptocurrency to clients and suggest allocating only a small portion of your portfolio towards it.
Even though the Federal Reserve's (Fed) recent projections around fewer rate cuts next year saw bitcoin prices sink, they have still more than doubled this year. If the Fed slows down its pace for rate cuts, Treasury yields will remain high and attract more investors compared to riskier assets like bitcoin.
Asset manager Blackrock recently suggested that a 1%-2% bitcoin exposure in a portfolio is a «reasonable range.»
While its important to note that Blackrock runs the largest spot bitcoin ETF, the iShares Bitcoin Trust (IBIT), some advisors also agree with having a limited allocation to bitcoin.
“If the price does actually appreciate...it will still add meaningful outperformance to the portfolio,” said Malcolm Ethridge, a certified financial planner (CFP) and Managing Partner at Capital Area Planning Group. “But if it doesn't live up to its promise, and the price falls to zero, it wouldn't completely wipe them out either.”
Bitcoin is an extremely volatile asset and having only a small investment could mean capping the downside.
«This should be viewed as outside of core investments because they’re so volatile and you can lose a significant amount of money,» saidDavid Rosenstrock, a CFP and founder of Wharton Wealth Planning.
Scott Sturgeon, CFP and founder of Oread Wealth Partners, advises people to reflect on why they actually want to invest in bitcoin.
“If you want
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