Bitcoin allocation should start with drawdown tolerance, not return targets

The key question in Bitcoin investing is not the target return, but the drawdown a portfolio can withstand, according to Mike Treidl, chief investment officer of Bluecoin Capital. Institutional adoption, he said, is likely to unfold over decades rather than as a short-term event. In an interview with Bitcoin Magazine on Oct. 13, Treidl said both institutions and retail investors should begin with the “risk budget first” when considering a Bitcoin allocation. Treidl said Bitcoin can repeatedly fall 50% to 60% from peak levels over a cycle.