Cryptocurrencies, particularly Bitcoin, have gained mainstream attention in the financial world. Despite regulatory uncertainty and market volatility, Bitcoin is seen as a disruptive technology offering a new way to store wealth digitally. Described as “digital gold,” its value lies in providing a service that allows people to store wealth without government or bank involvement.

Bitcoin’s role in a diversified portfolio is highlighted by its low correlation to stocks and bonds, historical returns, and liquidity. Adding Bitcoin to a portfolio has historically boosted risk-adjusted returns. However, the biggest risk lies in behavioral factors, such as panic-selling during price fluctuations. Dollar-cost averaging and a long-term holding strategy are recommended to mitigate this risk.

Looking ahead to 2026, Bitcoin’s price is influenced by supply and demand dynamics. Despite short-term fluctuations, the long-term forecast for Bitcoin remains positive. Success for Bitcoin as a long-term investment would involve becoming a significant player in the store of value market, continuing to eat into the physical market, and maintaining a positive regulatory environment.

The most significant risk for investors in Bitcoin lies in behavioral factors, such as panic-selling during price fluctuations. Bitcoin’s volatility can lead to emotional decision-making, which can be detrimental to long-term investment success. To mitigate this risk, investors are advised to size their portfolio appropriately, hold for the long haul, and rebalance their investments.

Read more at Morningstar: Bitcoin in 2026: How Investors Should Approach Cryptocurrencies Now