Bitcoin as a Foundational Asset

FMT Advisory’s Proprietary Research has determined that Bitcoin stands as the most advantageous form of capital for the vast majority of individuals. Based on this conclusion, Bitcoin warrants inclusion in any well-structured portfolio.

This determination stems from a thorough analysis conducted by FMT, which compared the essential characteristics of various forms of capital. Across key metrics including distribution, scarcity, control, and friction, Bitcoin emerged as the superior choice for the greatest number of people.

Moreover, Bitcoin boasts an exceptional competitive advantage—an expansive moat that surpasses most others identified by FMT. This moat, unparalleled in its breadth, underscores Bitcoin’s potential as a foundational asset in the portfolios of many.

In FMT’s view, Bitcoin’s status as the premier asset for the majority of individuals suggests that it will inevitably be recognized as a cornerstone asset by the broader industry over time. This realization expands the total addressable market significantly, with global adoption still in its early stages. As a result, Bitcoin’s long-term performance is poised to continue outstripping that of every other major asset.

The natural follow-up question often revolves around the appropriate allocation of Bitcoin within a portfolio, especially considering its notorious volatility. While it’s undeniable that Bitcoin exhibits volatility, FMT contends that this volatility does not equate to inherent risk, particularly for investors with a time horizon of four years or longer who strategically acquire Bitcoin within its value zones.

Echoing Warren Buffett’s famous assertion, FMT emphasizes that volatility does not denote risk. In fact, as a portfolio asset—distinct from day-to-day working capital or emergency funds—Bitcoin has asserted its dominance to such an extent that nearly every other asset researched by FMT appears long-term riskier by comparison.

This distinction underscores the uniqueness of portfolios managed by FMT Advisory, setting us apart from conventional approaches. By acknowledging Bitcoin’s extreme volatility while recognizing its comparable long-term risk profile to established assets, FMT advocates for a reduction in portfolio volatility by eliminating truly risky components.

For instance, consider venture capital (VC) investments. While a select few may achieve impressive returns (a top few out of 1,000s might achieve 20% returns), they require extraordinary luck and often come with lengthy lock-up periods (good luck picking the right one). Bitcoin, on the other hand, is very likely poised to deliver long-term returns exceeding 20% annually without the need for luck and offers full liquidity.

Similarly, speculative investments in unprofitable companies carry substantial risk and often yield minimal returns. By replacing these with Bitcoin, investors can fortify their portfolios and potentially enhance returns while reducing overall risk.

In visual form, we eliminate portfolio ideas that fall in lower quadrant, and replace those bad ideas with bitcoin. With the rest of the portfolio holdings, we remain vigilant on north of the border analysis:

In essence, substituting risky, long-duration speculative bets and overvalued assets with the more certainty of Bitcoin represents a prudent risk-adjusted portfolio adjustment, elevating Bitcoin to the status of a foundational asset. This strategic maneuver not only mitigates true portfolio risk but also holds the potential to amplify returns through a more secure asset allocation.

In adopting this approach, investors align themselves with a path characterized by reduced risk and enhanced potential returns—a path illuminated by the undeniable promise of Bitcoin.

As a fiduciary and unconflicted firm, FMT Advisory is a trailblazer reshaping the future of finance.


Best Regards, 

Nicholas Green, CIO