Ben Simpson (YouTube) advises wealthy investors entering crypto on how to allocate crypto as a percentage of total net worth. Using a client anecdote (a finance professional with $2.5M in ETFs and properties), he recommends targeting a modest crypto allocation (examples: 5–15% of net worth), prioritizing Bitcoin as a hedge against local-currency valuation, and limiting altcoin exposure to 3–4 larger-cap layer-one assets. He warns against overallocating to low-cap/meme coins, suggests long-term accumulation of Bitcoin, using one exchange, and recycling profits from smaller coins into Bitcoin.
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Just got off a call with a client. She works in finance, she's got $2.5 million in ETFs, she's got a couple of properties, and she's coming to crypto and has no idea how to allocate. This is so, so common when I speak to people new to crypto, especially wealthier people that are trying to understand how to allocate their crypto allocations. And I think about it as well, what percentage do you want your entire net worth in crypto? People come to crypto, they might buy some old coins, they follow people online, they buy some meme coins. That's not going to have any material impact in your portfolio. If you've got $2.5 million in assets, buying $1,000 of Pepe is not going to make any difference. So, all right, so I structure the crypto portfolio based on the broader investment portfolio. So let's say she wants to get her crypto portfolio allocation to say, 5, 10, 15% of her net worth. Well, predominantly, most of that. I would think Bitcoin is the play. All of those investments, ETF shares, property, is going to be valued in the local currency that you have, right? Valued in the US Dollar, the Aussie dollar, whatever it might be. Bitcoin is a hedge against that. So, predominantly, I'm going to allocate my majority of that crypto portfolio to bitcoin. Then I'm going to probably have three or four altcoins. I'm going to go in with size. Ultimately, I'm going to look at those larger cap assets. Maybe it's some plays and layer ones, but I'm not going to look at lower cap plays because it's not going to make any material impact on her portfolio. We're going with size. With larger assets, I'm only going to have three or four because it's having so many different coins when it's only a small percentage of allocation of an entire portfolio. Makes no sense. All right, play the long term, accumulate Bitcoin for a long time, take profits on those old coins to buy more Bitcoin, and then maybe you can start to use Bitcoin long term to leverage against that and buy property or different things. All right, that is how I look at crypto as an allocation percentage of a broader portfolio. Keep it simple, have one exchange and don't overallocate into low cap meme coins.
