Charles Schwab’s latest research on digital assets argues that cryptocurrencies’ place in a portfolio hinges less on return forecasts and more on how much risk an investor is willing to take.
The report frames bitcoin and ether (ETH) as high-volatility assets that can quickly reshape a portfolio’s risk profile. “Any allocation to cryptocurrency is likely to increase a portfolio’s volatility,” Schwab writes, pointing to sharp historical swings in both assets. Bitcoin and ether have each suffered drawdowns of more than 70% in past cycles, far exceeding typical declines in stocks or bonds.
Because of that volatility, even small allocations can have an outsized effect. Schwab finds that just a low single-digit…
