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Key takeaways

  • Cryptocurrency as an investment is not for the faint of heart. Past results do not guarantee future success.
  • Bitcoin has grown to be the most established cryptocurrency by a wide margin, with Ether nipping at its heels. At this time, the volatility of cryptocurrency remains the primary stumbling block to broad inclusion in portfolios.
  • We calculate that a 1% allocation to a blend of Bitcoin and Ether increases the portfolio’s expected tracking error by the same amount as a 5% equity overweight.
  • As the asset class matures, clear regulations are established, and investment accessibility continues to improve, reduced volatility could make cryptocurrency an effective portfolio diversifier.

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.

Note that tax, estate planning, and financial strategies require consideration for suitability of the individual, business, or investor, and there is no assurance that any strategy will be successful.

Wilmington Trust is not authorized to and does not provide legal or tax advice. Our advice and recommendations provided to you are illustrative only and subject to the opinions and advice of your own attorney, tax advisor, or other professional advisor.

Please see important disclosures at the end of the article.

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