Tools · Bitcoin Allocation Range
Bitcoin allocation range.
What size position fits your situation.
Bitcoin's volatility means position sizing matters more than timing. Answer four questions to find an allocation range that fits your time horizon, drawdown tolerance, and financial situation.
Worked example: Age 28, 35-year horizon. Could hold through an 80% drawdown without selling. Money is for retirement. Emergency fund and tax-advantaged accounts already in place. Suggested range: 5-20%. At 15% Bitcoin allocation, the position is within range. Rebalance if it drifts above 25% or below 5%.
FOUR QUESTIONS
If Bitcoin dropped 80% from your purchase price, what would you actually do?
Used to translate the suggested percentage range into dollar amounts.
SUGGESTED RANGE
ALLOCATION RANGE
0-0%
$0 to $0
REASONING
Answer the questions on the left to see your range.
REBALANCINGrebalancingBuying and selling assets to restore your target portfolio split after market movements cause drift.Full definition TRIGGERS
If Bitcoin grows past 0% of net worth: trim back to range.
If Bitcoin falls below 0%: hold and continue DCADollar-Cost Averaging (DCA)Investing a fixed amount on a regular schedule regardless of price, to reduce timing risk.Full definition, do not chase.
Review allocation annually or after a 30%+ price move.
If Bitcoin falls below 0%: hold and continue DCADollar-Cost Averaging (DCA)Investing a fixed amount on a regular schedule regardless of price, to reduce timing risk.Full definition, do not chase.
Review allocation annually or after a 30%+ price move.
How this tool works
- This tool synthesizes four risk factors into an allocation range. It is not investment advice. The output is a starting point for thinking, not a recommendation.
- The maximum suggested allocation is 25%, even when all conditions are optimal. Higher allocations may be defensible for very-long-horizon holders with deep conviction, but require explicit acknowledgment of catastrophic-loss risk.
- If your time horizon is under 3 years, the suggested allocation is 0%. Bitcoin's volatility profile is not suitable for short-horizon money. Use cash, T-bills, or short-term Treasuries instead.
- Drawdown tolerance is the binding constraint. An investor who would actually sell during an 80% drawdown should not hold more than they can watch fall to that level without acting. Pre-commit to your sizing in calm markets, before stress arrives.
- The site has documented Bitcoin's history of 80%+ drawdowns: 2011 (-94%), 2014-15 (-86%), 2018 (-84%), 2022 (-77%). See Bitcoin Allocation for the full historical context.
- The suggested range is for the Bitcoin portion only. The remainder of your portfolio should follow standard diversificationdiversificationSpreading investments across different assets so a drop in one doesn't devastate your entire portfolio.Full definition principles.
Related
Not financial advice. Bitcoin has declined 80%+ multiple times in its history. Only allocate what you can hold through that scenario without selling.