Bitcoin is a disruptive technology that offers a new way to store wealth in a digital format. It benefits from investors’ long-term concerns about debt and debasement and from the trend toward a more digitally native world. As more people want this digital wealth service, bitcoin’s long-term trajectory remains upward despite volatility.
From a portfolio perspective, bitcoin has low historical correlations to stocks and bonds, and it has often boosted risk-adjusted returns when added and rebalanced. Investors should consider dollar-cost averaging to mitigate behavioral risk and avoid committing too much capital at any one time. Looking toward 2026, bitcoin’s price is set by supply and demand, with institutional demand currently exceeding supply. Net institutional demand has remained higher than new supply, suggesting a positive long-term trajectory even if there may be sideways movement in the near term.
On the five-year horizon, the ambition is for bitcoin to become a meaningful portion of the store-of-value market, continuing to eat into the physical market; a positive regulatory environment and debt concerns would support that path. Behavioral risk remains the biggest challenge; bitcoin’s volatility tempts overexuberant buying and panic selling. A disciplined approach—holding for the long haul, rebalancing, and dollar-cost averaging—has historically supported portfolio returns. We will maintain a cautious but constructive stance on bitcoin and other cryptocurrencies within diversified portfolios, recognizing both the potential for long-run value and the importance of risk-management discipline.
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