Why Bitcoin Is the Upgrade for Large Traditional Portfolios
The underlying thesis is simple: for decades, the balanced portfolio has been based on the classic 60% stocks and 40% bonds. Today, however, in the era of uncontrolled money printing and its devaluation, that framework struggles to protect real purchasing power. The macroeconomic landscape and digitalization require a broadening of the spectrum.
Here's how the three most popular models are changing by strategically allocating 5% to Bitcoin.
The Three Most Popular Models Revisited with Crypto
1. Core-Satellite Model:
The core of this portfolio is composed of 75% All World ETFs + Bonds, with the remainder divided into 10% Gold, 10% individual stocks, and 5% Crypto.
The global core guarantees survival, but it's in the satellite that the battle against real inflation is won. Allocating 5% to BTC isn't a risky whim, but the only mathematical way to create a true asymmetric alpha generator.
2. All Weather (Ray Dalio):
A quick nod to Ray Dalio, a billionaire investor and founder of the world's largest hedge fund (Bridgewater Associates), famous for revolutionizing modern finance by introducing the concept of "risk parity" and designing the iconic All Weather portfolio, divided as follows:
30% stocks, 55% bonds, 7.5% gold, and 7.5% commodities.
To maintain Dalio's risk parity concept, we're leaving stocks and bonds alone. The original plan called for a 15% split between gold and commodities, but physical gold suffers annual inflation due to continuous mining. By including Bitcoin here, understood as true Digital Gold, we're applying Dalio's philosophy to the 21st century: we replace a portion of physical gold with the only ally with absolute scarcity (only 21 million):
30% Stocks, 55% Bonds, 5% Gold, 5% Commodities, and 5% Bitcoin.
Suitable for the prudent investor who aims to withstand any economic scenario (inflation, deflation, recession).
3. Permanent Portfolio (Harry Browne)
Here too, a fitting nod to Harry Browne, an American financial advisor who rose to fame in the 1980s for creating this type of portfolio designed to protect capital in any possible economic scenario.
25% Stocks, 25% Long-Term Bonds, 25% Gold, 25% Cash.
Browne's philosophy called for a quarter of the capital to be held in gold, completely outside the control of the banking system. If Browne were creating this portfolio today, he would likely also use Bitcoin.
Here too, separating 5% gold isn't a stretch, but the natural completion of his original vision: to include the only truly uncensorable, unconfiscatable, and transportable asset anywhere in the world simply by remembering the 12 words (seed phrase):
25% Stocks, 25% Bonds, 20% Gold, 5% Bitcoin, and 25% Cash.
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