Crypto in client portfolios? Advisors on bitcoin, 1 year after ETF approval

T.J. van Gerven, founder of Memento Financial Planning in Woburn, Massachusetts, said he also agrees that bitcoin is a viable asset class and can help the risk and reward characteristics of an overall portfolio when combined with traditional asset classes like stocks and bonds.

"I've been following bitcoin since 2011 and was highly skeptical for many years," he said. "However, its utility as a decentralized 'storage of value' that can't be manipulated by central banks serves as a valuable asset. I believe that the chances of bitcoin going to zero are very low, given its increasing adoption rate and that it has functioned as designed since inception."

While it is a relatively volatile asset, given its low correlation to traditional asset classes and high expected returns, van Gerven said he believes it's worth at least having some level of allocation of bitcoin.

"Within client-managed portfolios, we recommend having at least a 5% allocation depending on risk tolerance and risk capacity," he said. "It's incredibly important that clients understand the reasons behind adding an allocation to ensure conviction during inevitable bear markets, given how dramatic drawdowns can be. It's also important to separate bitcoin from cryptocurrency at large, as the majority of cryptocurrencies are Ponzi schemes where the supply can be manipulated and can very easily experience permanent loss of capital."