- The best time to buy bitcoin was “yesterday” and the second best is “today,” a chief strategist told CNBC.
- Investors should consider a 4% allocation of bitcoin to their portfolios, Meltem Demirors said.
- “A 4% allocation to bitcoin balances the reward, as well as the risk of drawdowns.”
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The ideal time to invest in bitcoin has already slipped by, according to Meltem Demirors, chief strategy officer at digital asset investment firm CoinShares.
“The best time to invest in bitcoin was yesterday – the second best time to allocate is today,” she told CNBC’s “Squawk Box Asia” on Monday.
Demirors believes regulatory concerns around cryptocurrencies, which have been around for a long time, are unlikely to thwart investor plans to allocate bitcoin to their portfolios. “At this point, our belief is: Bitcoin is not a question of if, but when,” Demirors said.
The size of the Bitcoin market recently shot past $1 trillion as it hit a record high of $58,354. The digital token was trading lower around $52,976 on Monday, but it has still gained 92% year-to-date. A flurry of adoption by major Wall Street players and large companies such as Tesla, Bank of New York Mellon, and Mastercard has added to its epic rally this year.
That said, Demirors said investors should not allocate significant portions of bitcoin to their balance sheets.
“Our research has found that in a traditional 60-40 portfolio, a 4% allocation to bitcoin balances the reward as well as the risk of drawdowns,” she said. The 60-40 portfolio mix is considered the simplest strategy for those investors who want diversified streams of income. It involves placing 60% in equities and 40% in fixed income.
Will Hobbs, an investment chief at Barclays, is more skeptical about bitcoin. He told Insider the digital asset sounds “increasingly cultist” and a rise in interest rates could dent the world’s most popular cryptocurrency. Hobbs said Barclays considers two factors in asset allocation – positive expected return and diversification appeal.
“Now it may well be over time that bitcoin satisfies both of those. But at the moment it’s very hard to say,” he said.