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Cryptocurrency Analyst Recommends Ideal Portfolio Allocation for Optimal Risk-Adjusted Returns.
ByAinvest
Wednesday, Jul 23, 2025 11:04 am ET1min read
Crypto analyst Benjamin Cowen recommends an 81% Bitcoin and 19% Ethereum portfolio allocation for optimal risk-adjusted returns. The allocation is based on modern portfolio theory and the Sharpe ratio from historical performance since 2015. He also suggests adding XRP to the mix, adjusting the breakdown to 76% Bitcoin, 17% Ethereum, and 7% XRP. Cowen warns against going "all-in" on crypto investments and emphasizes the importance of holding cash.
Crypto analyst Benjamin Cowen has shared a portfolio recommendation for investors seeking optimal risk-adjusted returns. According to Cowen, an 81% allocation to Bitcoin and 19% to Ethereum, based on modern portfolio theory and historical performance since 2015, offers the best balance of risk and reward [1].Cowen also suggests adding XRP to the mix, adjusting the breakdown to 76% Bitcoin, 17% Ethereum, and 7% XRP. This diversified portfolio aims to mitigate risk and capitalize on the potential growth of each asset. However, Cowen cautions against "going all-in" on crypto investments and emphasizes the importance of holding cash to maintain liquidity and manage market volatility [1].
The analyst's recommendations come amidst ongoing debates about the future of Ethereum and Bitcoin. Controversial economist Peter Schiff recently criticized Ethereum, suggesting that investors should sell the token and buy Bitcoin instead [2]. However, Ethereum has been surging on strong institutional inflows and corporate DeFi deals, with the token breaking through its previous peak at $3,700 [2].
Meanwhile, JPMorgan Chase is pioneering the integration of cryptocurrency into traditional banking by exploring loans backed by Bitcoin and Ethereum. This initiative could significantly accelerate the mainstream adoption of digital assets as financial institutions begin to incorporate crypto-backed lending into their product offerings [3].
Cowen's portfolio recommendations reflect a balanced approach to investing in the volatile crypto market. By diversifying across multiple assets and maintaining a cash buffer, investors can better navigate the risks and opportunities presented by the digital asset landscape.
References:
[1] https://www.mitrade.com/insights/news/live-news/article-3-975817-20250722
[2] https://en.coinotag.com/jpmorgan-may-explore-bitcoin-backed-loans-amid-evolving-us-regulatory-landscape/
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