Why You Should Diversify Your Trading Portfolio With Bitcoin

Why You Should Diversify Your Trading Portfolio With Bitcoin

A new piece of research has outlined the benefits that be gained by traders opting to diversify their portfolios with Bitcoin.

The analysis released by the research arm of Binance, saw them simulate various different bitcoin allocation techniques in existing diversified portfolios. The takeaway was that of all the portfolios their simulated covered, those that contained Bitcoin fared better than those without. The research revealed that when a portfolio contained bitcoin, it achieved “better risk-return profiles than traditional multi-asset class portfolios”.

Of course, investors know better than anyone the high-level of fluctuation that comes attached with bitcoin investment. With the last two year’s rapid growth, decline and recent re-emergence being a testament to this.

Despite this, it the research explained that “From a trading perspective, Bitcoin is one of the most liquid assets on the planet with consistently low spreads, high volumes and price efficiency as trading venues are continuously being arbitraged.” And that it is an “essential alternative asset to be included in multi-asset portfolios for its diversification properties”.

This is interesting to note for traders, as the trend of late seems to be heading towards alt-coins as opposed to the cryptocurrency big dog. With this research indicating that maybe investors shouldn’t turn their attentions entirely away from bitcoin too soon.

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