What Fraction of My Portfolio Should Be in Bitcoin? Pomp Says 100% Fiat is Risky

Wilfred Michael 

Wilfred Michael

News reporter

06 July 2019,
18:04
What Fraction of My Portfolio Should Be in Bitcoin? Pomp Says 100% Fiat is Risky

Given Bitcoin's impressive yield for investors within the last decade, it may no longer be a question of whether it's worth investing in, but what fraction of a person's portfolio should go into it.

In a recent interview with Cointelegraph, Bitcoin enthusiast, Anthony Pompliano sought to address that question but ended up giving the answer that most of us would always provide.

The fraction of one's investment in Bitcoin depends on a person's ambitions, and investment strategy within the period they're considering it.

One thing, though, that should not be part of the picture according to Pompliano is a portfolio that has no exposure at all to Bitcoin, thus, basically relying on either fiat currency or a basket of it.

What is the risk of having such a one-sided portfolio? Pomp explains,

“I would make the argument that having 100% exposure to fiat currencies is a really bad idea. Right? Because if one of those fiat currencies that you have 100% of your wealth in either hyperinflates or fails, you've got a lot of problems."

He further highlighted that while the government which is supposed to work for the best interests of its populace, ends up struggling to fulfill that obligation, Bitcoin has the most secure computing network and the economic properties that put it in pole position to eventually become the world's global reserve currency.

There is no doubt that if his prediction were to come true, then Bitcoin would be worth many times more than it is worth today, just over $11,000 at press time. 

With that possibility in mind, and natively embedded properties putting Bitcoin in good stead, a lack of exposure may end up being a decision that fund managers and even private investors would regret at the end of the day, or maybe not.

Yes. Bitcoin, as any other crypto asset is a very high volatile and risky investment, so you should never invest money that you cannot afford to lose entirely.