Schwab Advises Cautious Crypto Allocation in Portfolios
- Bitcoin and Ether can significantly impact portfolio risk even at low allocations.
- Schwab suggests two allocation frameworks: traditional (based on returns, volatility, correlation) and risk budgeting (based on risk tolerance).
- Bitcoin’s annualized volatility is 72.1% with a maximum drawdown of 73.4%; Ether’s volatility is 98.3% with a drawdown of 87.8%.
- A conservative portfolio might allocate 1.2% to Bitcoin or 0.9% to Ether for a 10% crypto risk contribution.
- Schwab plans to launch spot trading for Bitcoin and Ether by the first half of 2026.
Charles Schwab advises maintaining modest allocations of Bitcoin and Ether, emphasizing their high volatility compared to traditional assets.
Source (3.2)https://cryptobriefing.com/schwab-crypto-portfolio-volatility-warning/?rand=59535
