Bitcoin-only portfolio: Why a financial expert advises against it

Die historische Entwicklung von Bitcoin ist zweifellos außergewöhnlich. In den Anfangsjahren erlebte die Krypto-Leitwährung eine explosionsartige Wertsteigerung um mehrere tausend Prozent. Mit einer aktuellen Marktkapitalisierung von etwa einer halben Billion US-Dollar hat sich Bitcoin als etablierter Vermögenswert positioniert. Viele Experten sehen ein gesichertes zukünftiges Wertwachstum. Ist ein Bitcoin-only-Portfolio dann nicht die beste Wahl?

Not quite, says Mark Valek, investment specialist at asset manager Incrementum AG. Advantages could arise due to the high performance potential, according to BTC-ECHO. “However, we view Bitcoin-only portfolios critically due to the concentration risk.” According to the financial expert, the risk of default cannot be ruled out.

Risk of default with Bitcoin-only?

In traditional investments, default risk refers to the possibility that a counterparty - such as a bank or a company - cannot meet its financial obligations and the investor suddenly loses a large part of his capital, says Valek. With Bitcoin, the risk of default has a different dimension.

As a decentralized cryptocurrency, Bitcoin poses technical risks, such as security gaps in the code. It is also unclear what effect an internet failure would have. In addition, global regulatory changes could affect Bitcoin, even making it illegal. “Valuation discounts would depend on the extent and drastic nature of the measures,” concludes the financial expert.

That's why a Bitcoin-only portfolio is not recommended, especially if you have substantial assets, according to the Incrementum partner.