Charles Schwab: Even 1% crypto allocation changes portfolio risk

U.S. financial services firm Charles Schwab has advised that adding even a 1% allocation to cryptocurrency can alter a portfolio's risk profile. According to CoinDesk, the firm stated that the size of a crypto investment should be determined by an investor's tolerance for volatility rather than potential returns. Charles Schwab noted that Bitcoin and Ethereum are high-risk assets that have previously fallen by over 70%, and adding just 1-3% of these assets can significantly change a portfolio's overall volatility and its performance during market shocks. The firm explained that there is no single appropriate allocation for crypto, as it depends on an individual's risk appetite and tolerance for loss, recommending that it be approached as a high-risk supplementary investment rather than a core asset. Earlier this month, Charles Schwab announced the launch of a new service, Schwab Crypto, to support BTC and ETH trading.