{"id":8212,"date":"2026-04-08T12:09:41","date_gmt":"2026-04-08T12:09:41","guid":{"rendered":"https:\/\/cryptonews.uk.com\/?p=8212"},"modified":"2026-04-08T12:09:41","modified_gmt":"2026-04-08T12:09:41","slug":"schwab-says-theres-no-right-crypto-allocation-but-warns-risk-rises-fast","status":"publish","type":"post","link":"https:\/\/cryptonews.uk.com\/?p=8212","title":{"rendered":"Schwab Says There\u2019s No \u201cRight\u201d Crypto Allocation\u2014But Warns Risk Rises Fast"},"content":{"rendered":"<p><\/p>\n<div>\n<div id=\"blockquote-block_60e4e69c7868f1b89ad3f938eb325bfd\" class=\"blockquote-container\" style=\"border-color: #5100fc\">\n<div class=\"blockquote-text\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">There\u2019s no single \u2018correct\u2019 way to invest in crypto, brokerage firm Charles Schwab has found in a new research report coinciding with the upcoming launch of its new crypto investing platform.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The report highlighted two approaches to crypto investing, a returns-based approach and a risk-based approach, with a warning to remain cautious due to crypto\u2019s volatility.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<p>According to US financial services and brokerage giant Charles Schwab, there\u2019s no single \u201ccorrect\u201d way to invest in cryptocurrencies, with each investor\u2019s approach needing to be tailored to their specific goals, risk tolerance, outlook, and investing timelines.<\/p>\n<p>This insight came in a research report published by the financial services giant Monday. Schwab\u2019s report comes as the firm looks set to launch its first foray into direct crypto investing, Schwab Crypto. Currently, Schwab clients can only gain exposure to crypto through exchange-traded funds (ETFs) and other indirect crypto investments.<\/p>\n<p>In the past, Schwab has been critical of digital assets, in 2019 Rob Farmer, Schwab\u2019s managing director for corporate communications, said that \u201cinvestors should view these currencies as a purely speculative instrument.\u201d<\/p>\n<p>The \u2018Portfolio construction with cryptocurrencies\u2019 report\u2019s author, Jim Ferraioli, director of digital currencies research and strategy at the Schwab Center for Financial Research, laid out two strategies to help individuals make crypto investing decisions:<\/p>\n<ul class=\"wp-block-list\">\n<li><strong>A returns-based strategy<\/strong> in which crypto allocations are based on estimates of expected returns and volatility; and\u00a0<\/li>\n<li><strong>A risk-based strategy<\/strong> in which crypto allocations are made based on the amount of volatility they add to an investor\u2019s overall portfolio.<\/li>\n<\/ul>\n<p>\u201cThese approaches can be used in conjunction to help investors make informed decisions if they want to incorporate cryptocurrencies in their portfolio,\u201d Ferraioli explained.<\/p>\n<p>Regardless of how an investor makes their crypto investing decisions, Ferraioli cautioned that crypto remains much more volatile than more traditional investments like stocks and bonds.<\/p>\n<p>\u201cInvestors who choose to incorporate cryptocurrencies within their portfolios should recognize that they are highly volatile and therefore need careful consideration when weighing allocation decisions relative to traditional exposures,\u201d he said.\u00a0<\/p>\n<p>Ferraioli added that because of crypto\u2019s high volatility compared to other asset classes, it will tend to have an outsized influence on a portfolio\u2019s overall performance.<\/p>\n<p>\u201cAs weightings increase, even modestly, one\u2019s portfolio performance will be increasingly attributable to performance of the cryptocurrency allocation.\u201d<\/p>\n<p><strong>Related: Charles Schwab Prepares to Launch Spot Crypto Trading for Bitcoin and Ethereum<\/strong><\/p>\n<h2 class=\"wp-block-heading\" id=\"h-schwab-s-crypto-investing-approaches-in-detail\">Schwab\u2019s Crypto Investing Approaches in Detail<\/h2>\n<p>According to Ferraioli\u2019s returns-based strategy \u2014 also known as a \u201cmean-variance optimisation\u201d approach \u2014 the allocation of crypto will increase as estimated expected returns increase. Pretty simple, really. Low expected returns may not justify an investment in crypto at all under this approach, as other assets may be a better option.<\/p>\n<p>The report suggested a conservative Bitcoin allocation of 1%, a moderate allocation of around 6.6% and an aggressive allocation of 8.8% if expected returns are in the range of 15% per year.<\/p>\n<p>This strategy factors in volatility, so a more volatile cryptocurrency would justify smaller allocations for the same level of expected return. For Ether, which is significantly more volatile than Bitcoin, the report suggests a conservative allocation of 0.1%, a moderate allocation of 2% and an aggressive allocation of 2.5%.<\/p>\n<p>Using the risk-based approach, example allocations in the report were made based on the total portfolio risk the crypto investments account for, with a 5% for a conservative allocation, 10% for moderate and 15% for aggressive. In the example portfolios, the crypto exposure was taken out of the equity allocation of the portfolio.<\/p>\n<p><strong>Related: Bitcoin Traders Eye Sub-$60K Sweep as Market Tension Builds<\/strong><\/p>\n<p>The report found that just a 1.2% allocation to Bitcoin, or a 0.9% allocation to Ether in a portfolio, could account for 10% of the portfolio\u2019s overall risk.<\/p>\n<p>\u201cOur research suggests that cryptocurrencies can provide some diversification benefits in a portfolio that is already allocated to a mix of traditional investments such as stocks, bonds, and cash,\u201d the report said.<\/p>\n<\/p><\/div>\n<p>Cryptocurrency,Investing#Schwab #Crypto #AllocationBut #Warns #Risk #Rises #Fast1775650181<\/p>\n","protected":false},"excerpt":{"rendered":"<p>There\u2019s no single \u2018correct\u2019 way to invest in crypto, brokerage firm Charles Schwab has found in a new research report coinciding with the upcoming launch of its new crypto investing platform. The report highlighted two approaches to crypto investing, a returns-based approach and a risk-based approach, with a warning to remain cautious due to crypto\u2019s<\/p>\n","protected":false},"author":1,"featured_media":8213,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[3878,62,2188,1255,160,3806,220],"class_list":{"0":"post-8212","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-bitcoin","8":"tag-allocationbut","9":"tag-crypto","10":"tag-fast","11":"tag-rises","12":"tag-risk","13":"tag-schwab","14":"tag-warns"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.6 (Yoast SEO v26.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Schwab Says There\u2019s No \u201cRight\u201d Crypto Allocation\u2014But Warns Risk Rises Fast - Crypto News: Latest Cryptocurrency News and Analysis<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptonews.uk.com\/?p=8212\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Schwab Says There\u2019s No \u201cRight\u201d Crypto Allocation\u2014But Warns Risk Rises Fast\" \/>\n<meta property=\"og:description\" content=\"There\u2019s no single \u2018correct\u2019 way to invest in crypto, brokerage firm Charles Schwab has found in a new research report coinciding with the upcoming launch of its new crypto investing platform. 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