The Hidden Risk in Buying Just a Little Bitcoin

21shares, which issues crypto exchange-traded products, published Nov. 5 research using hypothetical backtests to compare rebalanced and unrebalanced small-crypto portfolios. In a 60% stock/40% bond portfolio with a 5% crypto sleeve split 3% Bitcoin, 1.5% Ethereum and 0.5% Solana, quarterly resets limited the worst peak-to-trough fall from September 2020 to September 2023 to 31.4%, versus 50.6% with no resets; the plain 60/40 benchmark fell 28.7%. From October 2023 to September 2026, the unrebalanced growth portfolio returned 13.98% a year with a 17.83% worst fall, while quarterly resets returned 13.17% with a 14.82% fall. The research concluded that adherence to a rule mattered more than its frequency; the results are hypothetical, not actual investor returns.