Warren Buffett would have benefited from a 2.5% Bitcoin allocation, data shows.
." But data shows that adding Bitcoin to a so-called"Rat Poison Portfolio," an equally weighted portfolio of Berkshire Hathaway, Microsoft, JPMorgan, and BlackRock stocks, would have produced much better returns for The Oracle of Omaha.Since 2014, allocating only 2.5% Bitcoin yearly to the"Rat Poison Portfolio" increases returns by nearly 20% with reduced risks, according to independent market analystRat poison portfolio with Bitcoin allocations.
Despite Bitcoin's notorious price volatility, Alpha Zeta noted that BTC's correlation with the stocks of Berkshire Hathaway, Microsoft, JP Morgan, and BlackRock is very low. Correlation between Bitcoin and Berkshire Hathaway, Microsoft, JP Morgan, and BlackRock stocks since 2014. Source: Alpha Zeta For instance, during the 2021-2023 bear market, allocating Bitcoin to the Rat Poison Portfolio could have negated losses by around 10%.In other words, BTC typically negates losses imposed by the downside movements in the said stocks. Therefore, allocating a small portion of Bitcoin to the Rat Poison Portfolio has proven to be a reasonable hedging strategy to offset potential negative returns.
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