Bitcoin Portfolio Allocation: What Percentage of Your Wealth?

Short answer: The right bitcoin share of your portfolio is set not by a forecast but by your crash test: bitcoin fell by 77 to 93% in every bear market. Assume −80% and ask yourself what loss on your total wealth you could take without selling. That loss divided by 0.8 is your maximum share. Big banks name 1 to 4%; long-term holders often hold considerably more.

The wrong question: "How much will bitcoin make?"

You have looked into bitcoin and want to buy. Then comes the question where many get stuck: how much? A colleague has everything in bitcoin, the bank adviser recommends "2% at most", and online you read about 50%.

Most people look for the answer in a forecast. If you believe in $1 million per bitcoin, you want a lot; if you believe in zero, nothing. The problem: nobody knows the price in ten years. What you do know is your wealth and your nerves.

This article turns the question around. Not "How much can I win?" but "How much can I lose without losing my nerve?". Where to buy and what it costs is in the guide Buying bitcoin.

What counts as your wealth?

Before you calculate percentages, you need the base. Add up everything you could sell: current account, savings account, brokerage account, bitcoin, precious metals.

Two items are a matter of opinion:

• Your home: it has a value, but you live in it. If you calculate cautiously, you leave it out.
• Pension entitlements: the state pension, a Swiss Pensionskasse (occupational pension fund) or Säule 3a (Swiss private pension pillar) secure you later, but are not available today. Leave them out of the calculation too.

If you calculate with freely available wealth only, your percentage becomes more honest. 20% bitcoin alongside a paid-off house and an occupational pension is a different risk from 20% of your only savings.

The base first, then bitcoin

Three things come before the first percent of bitcoin:

1. Emergency fund: three to six months of expenses in your account. Otherwise you sell bitcoin at the first car repair, possibly at the bottom.
2. Pay off expensive debt: an overdraft or instalment loan at 8 to 12% interest certainly costs more than any investment reliably earns.
3. Known expenses: money you will definitely need in the next four years, for example for a car, a move or education, does not belong in bitcoin.

Why four years? Anyone who bought at the high was back in profit after at most 3.2 years in past bear markets. The figures for each crash are in All bitcoin bear markets compared. That is no guarantee for next time.

The crash test: your bitcoin portfolio share from one number

Since 2011, bitcoin has fallen 77 to 93% from its high in every major bear market. So calculate as if your bitcoin portion loses 80%. Then you immediately see what that means for your total wealth:

The other investments stay the same in this calculation. In real crises shares often fall too, and the loss is then bigger.

Now comes the real question: which row can you take without selling? Not in your head, but after a year of falling prices and bad news. What that feels like and what helps is described in HODL psychology: coping with volatility.

Where bitcoin stands today

Is the next −80% crash coming right away? On Nov 13, 2026, bitcoin was at $69’219, only 3% above the Power Law floor of about $67’100 (€60’600, CHF 55’900). Since 2011 the price has never fallen more than 12% below the floor. More on this in The Power Law floor: how low can bitcoin fall?.

So the model says: from here, the way down has been short so far. For your share that changes little. The next big crash starts from a future high, and by then your bitcoin portion is larger than today. So always run the crash test with −80%, wherever the price currently stands.

What your bitcoin would be worth at today's floor is shown by the floor calculator:

The price relative to the trend and the zones from floor to euphoria are updated daily on the Power Law page. How the model calculates is in the methodology.

What big banks recommend

In the last two years several large asset managers have named figures for the first time:

BlackRock justifies the upper limit with risk: 2% bitcoin contributes about 5% of the volatility risk of a classic portfolio of 60% equities and 40% bonds, about as much as a single one of the big US tech stocks. Above that, its share of the risk grows quickly.

Read these figures correctly. Banks make recommendations for many clients at once, including those who sell at the first crash. Their yardstick is a portfolio that rarely falls more than 20%. If you hold bitcoin for years and pass the crash test, you can justifiably go higher. If you don't pass it, 1 to 2% is right for you.

What different shares would have returned since 2015

How would a global equity portfolio with some bitcoin mixed in have performed? We worked it out: €10’000 split between an MSCI World ETF and bitcoin, reset to the target share once a year.

Start end of January 2015, as of Nov 13, 2026:

Two things stand out. Up to about 5%, the return rose significantly while the largest decline barely grew. Above that, both grew, and at 50% your portfolio would at times have lost half its value.

And what if you had started at the worst moment? Start end of November 2021, at the high of the last cycle:

Here too the mixed portfolios came out ahead, because the annual reset bought bitcoin at the bottom. Pure bitcoin was only 24% up after almost five years.

Calculated with monthly closing prices from Yahoo Finance: iShares Core MSCI World (EUNL, distributions reinvested) and BTC/EUR, without fees and taxes. With daily prices the declines would be larger, for bitcoin alone about −77% instead of −69%. The years since 2015 were exceptionally good for bitcoin. No future return follows from that.

Holding your share: upper limit and rebalancing

A share doesn't stand still. If bitcoin rises sharply, 10% quickly becomes 25%, and you carry a risk you never wanted. If bitcoin falls, your share drops below the target.

So set two numbers:

• Target share: for example 10%. Your savings go wherever they keep you at it.
• Upper limit: for example 15%. If it is exceeded, you sell back down to the target share.

That way you automatically sell after strong rises and never in a crash. A worked example in euros and francs is in Taking bitcoin profits: partial sales by rules.

Remember taxes. In Germany, gains on bitcoin you have held for more than a year are tax-free. So when rebalancing, sell older holdings where possible. In Austria every gain on bitcoin bought since March 2021 costs 27.5%; in Switzerland capital gains are generally tax-free for private investors (as of 2026).

Your bitcoin share in four steps

1. Count your wealth. Only what is freely available, without the emergency fund, your home and pension entitlements.
2. Set your loss limit. What amount less in your account still lets you sleep soundly? Write it down, and ask your partner. How to discuss it together is shown in How to talk to your partner and family about Bitcoin.
3. Calculate your maximum share. Loss ÷ wealth ÷ 0.8.
4. Build it up. Whether you buy the share at once or over months depends on how you handle swings. What both have returned since 2011 is shown in Savings plan or lump sum.

How much bitcoin you need for a particular goal, for example retirement, is calculated by My Goal. How to build a plan over years and live by it is taught in the Academy, stage 3: plan and live.