Crypto Investing Advice: 'A Little Goes a Long Way'

Money manager says crypto is 'like cayenne pepper' for investors' portfolios

Apr. 10, 2026 at 9:26am

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An extreme close-up of a complex network of gears, pulleys, and metal components representing the inner workings of a bank's financial infrastructure, conceptually illustrating the complex mechanics behind investment portfolios and asset allocation.As crypto becomes more mainstream, financial advisors caution that this highly volatile asset class should only make up a small portion of most investment portfolios.West Palm Beach Today

Bitwise Asset Management's Katherine Dowling says cryptocurrency should be treated like a spice in an investment portfolio - 'a little goes a long way.' Financial advisors recommend allocating only 2-3% of a portfolio to crypto due to its extreme volatility, which can be up to 8 times higher than the stock market.

Why it matters

As crypto becomes more mainstream, investors are looking for guidance on how much to allocate to this speculative asset class. Advisors caution that crypto's high risk profile means it should only make up a small portion of most portfolios, especially for older or more conservative investors.

The details

Dowling uses the analogy of cayenne pepper to describe the appropriate crypto allocation, saying 'a little goes a long way.' Certified financial planner Ivory Johnson agrees, noting that the more volatile an asset is, the less of it an investor should hold. He recommends a 2-3% crypto allocation, which can have an outsized impact similar to a larger position in a less volatile asset. Advisors say the appropriate crypto allocation depends on an investor's risk tolerance and time horizon, with younger investors able to stomach more volatility.

  • In March 2026, Bitcoin reached a new all-time high above $73,000.
  • Bitcoin prices collapsed by 64% in 2022 to below $20,000, compared to a 19.4% drop in the S&P 500.

The players

Katherine Dowling

General counsel and chief compliance officer at Bitwise Asset Management, a crypto money manager.

Ivory Johnson

Certified financial planner and member of CNBC's Financial Advisor Council, founder of Delancey Wealth Management.

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What they’re saying

“The more volatile an asset class is, the less of it that you need.”

— Ivory Johnson, Certified financial planner

“Bitcoin and other cryptocurrencies are a very speculative investment and involves a high degree of risk. Investors must have the financial ability, sophistication/experience and willingness to bear the risks of an investment, and a potential total loss of their investment.”

— Investment strategists

What’s next

Investors may wish to consider dollar-cost averaging into crypto, buying a little bit at a time until reaching their target allocation. They should also rebalance periodically to ensure crypto gains or losses don't skew their overall portfolio.

The takeaway

Crypto's extreme volatility means it should only make up a small portion of most investment portfolios, typically 2-3%. Advisors caution that crypto is a highly speculative asset that carries significant risk, and the appropriate allocation depends on an investor's risk tolerance and time horizon.