Has Bitcoin Found Its Place in the Portfolio Sun?

Investing in bitcoin can feel a lot like riding the Cyclone on Coney Island: ups, downs and a whole lot of bumps.

In October 2025, Bitcoin topped $126,000, an all-time high, before falling to less than half that by the end of June. Now, it’s surging again, recently surpassing $84,000. Despite the volatility, crypto adoption among advisors is growing. Last year, 42% of independent RIAs reported allocating to crypto in client portfolios, up from 28% the year before, according to a Bitwise and VettaFi survey. Meanwhile, roughly $2.7 billion has flowed into BlackRock’s iShares Bitcoin Trust (IBIT) in the past month, a sign of continued investor demand for the asset.

So, is crypto becoming a standard component of portfolio construction? Should every portfolio have at least a little bitcoin? Some advisors see meaningful opportunities in digital assets, while others remain skeptical. “Most advisors are still relatively cautious,” said Amy Arnott, portfolio strategist at Morningstar. “People would want to see a bit more price stability first.”

Big Money. Big Whammy

Bitcoin certainly has high-return potential:

• Over the past decade, its price has surged roughly 14,000%, vastly outpacing the S&P 500’s roughly 300% total return, including dividends.
• But those returns come with dramatically greater volatility. Bitcoin fell 74% in 2018 alone.

That volatility is part of the appeal, though, said Mark Stancato, founder of VIP Wealth Advisors, who views the category as a legitimate asset class for investors who can tolerate the swings. For those clients, he typically allocates about 5% to digital assets. “Large enough that success can matter, but small enough that a major drawdown shouldn’t derail the financial plan,” he said.

Kevin Feig, founder of Walk You to Wealth, recommends going further: an 8% to 15% bitcoin allocation, where appropriate. He views bitcoin as a scarce, collectible-like asset and said its historically low long-term correlation with stocks, bonds and gold gives it diversification potential. He also said bitcoin and other digital assets will become standard options in 401(k) plans and target-date funds. “We’re still early, but institutional adoption is accelerating fast,” he said.

Don’t Know What You Don’t Know. But Bitcoin’s volatility and speculative nature make it difficult to evaluate, said Nathan Nicolaisen, founder of Redspire Wealth Management. Unlike a stock, where fundamentals or a new product can help explain price movements, bitcoin’s drivers are often less clear. “It could be a simple rotation out of other assets, or it could be based on fears of inflation,” he said.

Nicolaisen also pointed to crypto’s limited regulation and lack of income generation. Bitcoin has variously been pitched as a store of value, payment system, alternative to gold and speculative asset. “The narrative around cryptocurrency, primarily bitcoin, has shifted so much that it’s unclear what purpose it serves in a portfolio,” he said.