Bitcoin portfolio for beginners! How much Bitcoin do I need in my portfolio?

Between hype, risk and strategy. A little guide for beginners

Hardly any other topic generates so much discussion, FOMO and frowns at the same time. Some swear by it, others advise caution. And you sit somewhere in between - perhaps with an initial portfolio, a little curiosity and the question: "Should I also invest in Bitcoin?"

Good question. And as is so often the case with investing, there is no one right answer. But one thing is pretty certain: all-in is certainly not the best strategy. Because if you want to invest well in the long term, you need one thing above all: a diversified portfolio. A healthy mix of different asset classes. And yes, Bitcoin can definitely be a small part of this. 

What does "diversified investing" actually mean?

Before we dive straight into the world of Bitcoin, Ethereum and the like, it's worth taking a quick look at the big picture.

When you invest, it's not just about what feels good at the moment or what's in the headlines. It's about spreading your money across different areas, the so-called asset classes. This way you can minimise the risk of a single market dragging everything down.

Think of your portfolio as a balanced menu:

A bit of equities (for example, companies from all over the world), a bit of bonds (stable ingredients), perhaps property, commodities and yes, for some, a little dash of Bitcoin on top as hot sauce.

Are Bitcoin and co. just a trend or really a new asset class?

Cryptocurrencies such as Bitcoin and Ethereum have been around for over a decade. What started as a technical experiment has now developed into a market with a volume in the trillions..

But: Bitcoin and other cryptocurrencies are not just a digital coin. It is an asset class in its own right with its very own rules. There is comparatively high volatility, strong fluctuations and a completely different mechanism to traditional markets.

That can be exciting. But also challenging.

This is why many financial professionals say that anyone adding Bitcoin to their portfolio should understand that it is not a traditional investment, but rather a speculative addition.

Why many people still find digital currencies exciting

Even if Bitcoin (still) plays a smaller role in the overall market compared to shares or ETFs, there are reasons why many people like to put some of their money into digital currencies:

• Independence: Bitcoin is not tied to central banks or governments. This appeals to many, especially in times of crisis.
• Technology and innovation: Blockchain technology is seen as forward-looking, similar to the internet in the 1990s.
• Long-term potential: Some see Bitcoin as digital gold or as protection against inflation.

Sounds promising, but that is precisely why it is important to look not only at the opportunities, but also at the risks.

What are the risks of Bitcoin?

To be honest: Bitcoin is not for the faint-hearted. Here are three risks of Bitcoin:

• High fluctuations: The value can change significantly within a few days. If you are not prepared for this, you should keep your hands off it.
• Regulatory uncertainty: Laws and regulations surrounding Bitcoin are still developing, which always harbours uncertainty about its development.
• Technical complexity: wallets, keys, transfers. If you want to manage it yourself, you need to know a bit about it. Or you can use a Bitcoin app like Relai.

The following therefore applies: Bitcoin is not (yet) a substitute for a solid investment strategy, but rather a supplement

What is Relai?

Relai is a user-friendly app from Switzerland that allows you to easily buy, sell and save Bitcoin without any complicated verification processes. The big advantage: Relai attaches great importance to privacy, security and simplicity. Relai is an uncomplicated way for beginners in particular to invest in Bitcoin and learn more about crypto.

Use the code ‘Selma’ to get a 10% discount on fees when buying and selling BTC via Relai.

How much Bitcoin is "okay"?

Now to the question of all questions.

There is no fixed number, no formula and no "one size fits all". But: In a well-diversified portfolio, each asset class should play a clear role. Bitcoin, for example, can make sense as a small, speculative part, just as you might put a few per cent into commodities or start-ups.

Many people who have Bitcoin in their portfolio deliberately do so on a very small scale. Why is that? Because they know: The opportunities are great, but so is the risk. And that is precisely the essence of diversification: You not only spread your money, but also your risk.

What can help you make a decision?

Before you invest in Bitcoin or stay away completely, these thoughts may help you:

• Understand the basics: What exactly is Bitcoin? What makes Bitcoin special? Without a basic understanding, it's still a gamble.
• Know your risk tolerance: How do you deal with losses? Would a sharp fall make you nervous or leave you cold?
• Look at your overall picture: What does your portfolio look like as a whole? Is it already broadly diversified or still highly focussed?
• Think long-term: Short-term trends are tempting. But investing is not a sprint - it's more of a marathon.

Conclusion: Bitcoin? Perhaps. But not mindlessly.

Bitcoin and other cryptocurrencies are exciting, no question about it. And if you are well informed, you can see it as a small component in your own portfolio - as a supplement, not the centre.

Because in the end, what counts is not whether you have missed out on "the next coin", but whether your overall financial plan fits in with your life.

Diversified investing means making conscious decisions, not blindly going along with them.

And that's exactly what a plan helps you do, with or without Bitcoin. If you want to invest in a diversified way, you can find out more here.