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How a Little Bitcoin Can Change Your 60/40 Portfolio a Lot

After bitcoin’s recent slide, it may be tempting to buy the dip. Here’s what to consider when thinking about adding it to a balanced portfolio.

The price of bitcoin has stumbled after skyrocketing over the past year. From mid-April through June 25, 2021, the popular cryptocurrency lost nearly half its value. The CMBI Bitcoin Index, which tracks its spot price, posted a 49.1% loss over the period (though it’s still up more than 11% for the year to date and 240% over the past year as of June 28).

If you’re considering buying the dip, keep in mind that even a small amount can alter the risk profile of a typical balanced portfolio. Like plutonium for your portfolio: A little bit has a big impact.