Yale economist Aleh Tsyvinski, who has taught economics at the prestigious Yale university for many years, has said that every investor who believes bitcoin can perform as well as it did in 2017 should invest at least six percent of their holdings in crypto.
“If you as an investor believe that bitcoin will perform as well as it has historically, then you should hold 6% of your portfolio in bitcoin. If you believe that it will do half as well, you should hold 4%. In all other circumstances, if you think it will do much worse, then you should still hold 1%,” Tsyvinski said, in an interview with Yale PhD candidate Yukun Liu.Billionaires Employ Similar Method
In an interview with CNBC last month, Marc Lasry, the billionaire co-founder of Avenue Capital Group, whose net worth is estimated to be at around $1.68 billion, shocked the panels at CNBC Fast Money when he revealed that he has invested more than one percent of his holdings in crypto.
Given his family’s $1.68 billion net worth, one percent of Lasry’s holdings would be equivalent to $16.8 million, all invested in cryptocurrencies like bitcoin and ether.
Said Lasry:“I wouldn’t say [bitcoin is] completely speculative but it is speculative. It is around 1 percent, and [I invested in bitcoin] a few years ago. I bought a lot more in the last year, when probably the average price of bitcoin was $5,000 to $7,500.”
Some billionaire investors such as Galaxy Digital’s Mike Novogratz and PayPal founder Peter Thiel are said to have allocated a significant chunk of their net worth in crypto, and notably, Novogratz invested a substantial amount of his personal holdings in other major cryptocurrencies like EOS.Berlin, Germany, March 19, 2014. Hy! Summit – Image by Dan Taylor. www.heisenbergmedia.com
Tsyvinski emphasized that every investor who believes bitcoin or cryptocurrencies as an asset class will survive and have the potential to record similar gains in the long-term ...