Our goal at Thryve is to create customized portfolio solutions to maximize your risk adjusted investment returns, going beyond traditional strategies to ensure that you have a path to true financial freedom.
This paper outlines our investment thesis for allocating 3%-5% of the portfolio to Bitcoin as a core holding. This allocation is supported by historical performance analysis, fundamental economic trends, and Bitcoin’s unique qualities as a financial asset.
Bitcoin’s inclusion in a diversified portfolio has demonstrated the potential to enhance returns without materially changing portfolio risk:
The following graph to shows the level of returns in a diversified portfolio without Bitcoin versus with Bitcoin, while only allowing the portfolio to invest up to 5% in the digital asset.
Bitcoin's investment case is further bolstered by enduring macroeconomic and geopolitical trends:
Escalating geopolitical tensions and economic sanctions have highlighted Bitcoin's role as a borderless, neutral asset. It offers liquidity and financial autonomy in times of crisis, appealing to investors in uncertain times.
With the rise of Central Bank Digital Currencies (CBDCs), governments could exercise unprecedented control over monetary systems. Bitcoin's decentralized framework provides a safeguard against these potential overreaches, offering freedom and privacy to individuals and institutions.
Bitcoin has gained legitimacy as an institutional asset, with increasing allocations from endowments, corporations, and sovereign wealth funds. Enhanced regulatory clarity and infrastructure (e.g., ETFs, custody solutions) are further driving mainstream adoption.
Based on historical performance, diversification benefits, and alignment with long-term macroeconomic themes, Thryve recommends a core allocation to Bitcoin within your portfolio, in the 3%-5% range. While optional to the client, this allocation provides exposure to the asset’s return-enhancing potential while hedging against systemic and geopolitical risks.
We believe the role of Bitcoin in your portfolio is a long-term holding, but we will actively monitor the position, taking into account market developments and Bitcoin's evolving role in the global financial system. Should you have any questions, we are available to discuss this in greater detail.
IMPORTANT INFORMATION
There is no guarantee that Bitcoin will continue to perform at historic returns and market risk and loss of principal is possible.
Diversification does not guarantee against a loss.
Investing in Bitcoin involves significant risks due to price volatility and the potential for theft or compromise of private keys. Digital assets represent a fairly new industry, and future regulations and governance is unclear. The price of Bitcoin is tied to overall market sentiment and acceptance.
This Bitcoin primer is based on the assessment of the current market environment as of Q4 2024, and is subject to change.
1) This efficient frontier graph illustrates the optimal mix of investments to achieve the highest potential return for a given level of risk. It demonstrates how balancing a portfolio can maximize growth while minimizing unnecessary risk. Returns are dependent on the investment combinations that make up the portfolio. A security's standard deviation is synonymous with risk. Ideally, an investor seeks to fill a portfolio with securities offering exceptional returns but with a combined standard deviation that is lower than the standard deviations of the individual securities. The data reflects a ten-year period (10/31/2014 – 10/31/2024). Stocks are represented by theB500T, bonds by the Bloomberg Aggregate Index, cash by the Bloomberg TreasuryIndex, and Bitcoin by the spot price. Note: Returns shown do not account for potential transaction costs, commissions, or expenses, which would lower actual returns.
Prepared by Thryve Wealth Management, LLC, an SEC Registered Investment Advisor.
