In the world of portfolio theory, there is an overarching, irrevocable dogma: Those looking for higher returns must be prepared to take more risks. So there is typically a linear relationship between risk and return. The big question is how Bitcoin fares from this point of view.This can be checked with government bonds. German government bonds, rated with the top AAA rating, promise a return of -0.59 percent over ten years. Not a particularly good investment, but pretty safe. Meanwhile, the current interest rate for 10-year Brazilian bonds is 7.84 percent. The rating agency Fitch rated the paper BB-. Investors have to take into account a potential bankruptcy of the Brazilian budget when investing.Conversely, what percentage of the portfolio investors invest in which type of security depends solely on their risk tolerance. Risk-averse investors are likely to prefer a portfolio that relies more on safe bonds and more aggressive investors focus more on stocks, ETFs, and alternative investments.Anyone who follows the textbook opinion about the linear relationship between risk and return runs the risk of missing out on the really good opportunities. There are investments that don\u2019t quite fit into the described pattern. One of them, as you can already guess, is Bitcoin. Not only is Bitcoin retrospectively the best-performing asset in human history; Even in relation to the associated risk, BTC beats the competition by far. Depending on where you start measuring, BTC has grown by over three million percent in the first decade of its existence.So do investors have to be extremely willing to take risks in order for a BTC investment to be considered? Limited. Because, contrary to what modern portfolio theory suggests, Bitcoin is less risky than assumed. Sure, digital gold is quite volatile \u2014 significantly more volatile than gold, oil, and the S&P 500, for\u2026<\/p>","protected":false},"excerpt":{"rendered":"
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