{"id":7316,"date":"2022-04-20T00:15:00","date_gmt":"2022-04-20T08:15:00","guid":{"rendered":"https:\/\/www.cultofmoney.com\/?p=7316"},"modified":"2022-04-20T09:47:34","modified_gmt":"2022-04-20T17:47:34","slug":"crypto-portfolio-allocation","status":"publish","type":"post","link":"https:\/\/www.cultofmoney.com\/crypto-portfolio-allocation\/","title":{"rendered":"Should Your Asset Allocation Include Crypto?"},"content":{"rendered":"

\"Crypto<\/span><\/p>\n

For the past few years, cryptocurrency investing has grown in popularity. Pretty much everyone knows about Bitcoin<\/a>, Ethereum<\/a>, and the powers of blockchain technology these days. And for many, crypto is the most exciting alternative asset class out there.But how can you decide if your asset allocation should include crypto? And if you decide to invest, how do you balance your new digital assets with the rest of your portfolio?<\/p>\n

Let\u2019s look at the pros and cons of adding crypto assets to your portfolio and including them in your investing strategy.<\/p>\n

Crypto As An Alternative Asset Class<\/h2>\n

Digital assets, including cryptocurrencies and non-fungible tokens (NFTs)<\/a>, are increasingly accepted as asset classes by many investors and financial professionals. And if you ask your friend group, there’s a good chance you know someone currently investing in crypto.<\/p>\n

This newfound popularity makes sense when you consider how quickly crypto has grown recently and the fact that major tokens even correlate to the stock market<\/a> nowadays.<\/p>\n

Currently, the global cryptocurrency market cap is about $2 trillion<\/a>, and the global NFT market cap<\/a> is nearing $50 billion. While these market caps pale compared to the total value of stocks or the global real estate market, these are still fairly substantial numbers.Due to the increase in crypto’s market cap, some have started considering crypto as an alternative asset class. Rather than being considered part of the \u201ctraditional\u201d asset allocation of stocks and bonds, there\u2019s a case for crypto assets to be included with alternative investments like precious metals and other commodities.Alternative assets can be attractive for an investment portfolio because they add the potential for growth to the portfolio \u2014 beyond what you might expect with stocks and bonds.<\/p>\n

And by adding alternative assets, especially if much of your portfolio focuses on index products, it\u2019s possible to provide a little extra oomph to your portfolio. Cryptocurrencies offer that potential, especially when rapid price increases that have happened in the past for various cryptos are taken into account.<\/p>\n

Pros & Cons Of Including Crypto In Your Portfolio<\/h2>\n

Before you decide to include crypto in your asset allocation, it\u2019s important to understand the advantages and disadvantages involved.<\/p>\n

Mainstream media might be full of stories of Bitcoin millionaires and successful crypto investors. But while it might seem like  a no-brainer to add crypto to your portfolio, it\u2019s important to be prepared for some of the risks.<\/p>\n

Pros<\/h3>\n

Some advantage of investing in cryptocurrencies for some of your portfolio include:<\/p>\n