A new report from Charles Schwab shows that allocations to Bitcoin and Ethereum can vary dramatically depending on investor return expectations. In traditional portfolio models, Bitcoin exposure ranges from near zero to as high as 22.4%, while moderate portfolios could allocate up to 16.9% if expected returns climb to 25%. When expectations drop below 10%, both Bitcoin and Ether receive little to no allocation.

The analysis also highlights that Ethereum typically receives smaller weights due to higher volatility, though allocations still rise significantly under bullish assumptions. At a 25% expected return scenario, Ether exposure can reach 8.2% for moderate portfolios and 10.7% for aggressive ones. The findings emphasize that crypto’s role in portfolios is highly sensitive to investor conviction.

Using a risk-based framework, Schwab found even small allocations can have outsized influence. A 1.2% allocation to Bitcoin — and about 0.9% to Ether — can account for roughly 10% of total portfolio risk. The report concludes there is no “correct” crypto allocation, but even modest exposure can materially impact overall portfolio performance.
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