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Diversification benefits of adding cryptoassets to a portfolio from "summary" of Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond by Chris Burniske,Jack Tatar
When constructing an investment portfolio, one of the key considerations is diversification. Diversification involves spreading investments across different asset classes to reduce risk and increase the likelihood of achieving positive returns. Traditionally, investors have diversified their portfolios by investing in stocks, bonds, real estate, and commodities. However, the emergence of cryptoassets as a new asset class has led to a reevaluation of traditional diversification strategies. Adding cryptoassets to a portfolio can provide diversification benefits that are not available through traditional asset classes. Cryptoassets have a low correlation to traditional asset classes, which means that they tend to move independently of stocks, bonds, and other assets. This lack of correlation can help reduce overall portfolio risk, as losses in one asset class may be offset by gain...
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