Bitcoin Hedged Traditional
The goal of this model portfolio is to increase returns while mitigating inflation risks associated with monetary and fiscal policy.
Holdings include an S&P 500 Index fund (SPY), Bitcoin, and Gold.
Assumptions:
- 10k invested Jan 1, 2020
- Dollar cost averaging and reinvestment of staking rewards is not considered
- Rebalanced 1x annually
Holdings
| Asset | Price | Units | Value | % of Holding | Initial Balance | |
| Bitcoin | 10937 | 0.0697 | 762.26646 | 7.15% | 5.00% | |
| Gold | 1957.1 | 0.641 | 1254.5011 | 11.76% | 10.00% | |
| S&P 500 (SPY) | 330.65 | 26.16 | 8649.804 | 81.09% | 85.00% |
Performance
| Diversified Digital Assets | Large Cap Cryptos | Bitcoin | Bitcoin-Hedged Traditional | S&P 500 | |
| 2020 YTD | 136.58% | 65.12% | 52.45% | 6.67% | 1.76% |
Bitcoin and other cryptocurrencies have strongly outperformed the traditional market year to date. A traditional portfolio with 5% allocation to bitcoin achieved nearly 4-fold greater returns, increasing gains by 4.91% on an absolute basis.
If Bitcoin went to zero during this time period, the portfolio would have reported only a 0.96% loss YTD. This would have underperformed the S&P 500 by only 2.72%.
In 2020, Bitcoin has served as a volatile, but non-correlated asset with potential for asymmetric returns.
*Cryptocurrencies and digital assets are highly volatile and risky. Model portfolios are for reference and education only, and are not a recommendation to buy or sell any investment.