---
title: Why Bitcoin Merits Consideration in your Portfolio
description: Explore why Bitcoin merits consideration in your portfolio, highlighting its advantages over gold and its potential as a hedge against fiat currency devaluation.
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 Jun 7, 2025 10:25:00 AM

# Why Bitcoin Merits Consideration in your Portfolio

![Picture of Vincent Wales](https://content.thebitcoinadviser.com/hs-fs/hubfs/Black%20and%20white%20exp%202%20(2).jpg?width=50&name=Black%20and%20white%20exp%202%20(2).jpg) [Vincent Wales](https://content.thebitcoinadviser.com/blog/author/vincent-wales)

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“The tendency of our government to want to debase its currency  
over time, there’s no system that beats that.”

Warren Buffett, 2025 Berkshire Hathaway Annual Meeting

 

What Warren Buffett Said at the 2025 Berkshire Hathaway Meeting

As many readers will know, Warren Buffett recently announced his intention to step  
down as CEO of Berkshire Hathaway at the end of 2025, concluding a legendary 60-  
year tenure.

Yet among the farewells and reflections, one overlooked segment of Buffett’s speech  
stood out — his candid thoughts on money.

In his remarks, Buffett expressed deep concern over the persistent tendency of  
governments, including the US, to erode the value of their currencies over time. He  
made it clear that this issue isn’t isolated to America, it’s a global phenomenon. He  
further noted that ongoing fiscal deficits are not sustainable and warned of the  
potentially severe economic consequences.

(For those interested, Buffett’s full comments are available via the video link below.  
Skip to the 3:10 mark in this seven-minute video for the segment on currency.)

[Warren Buffett on why U.S. fiscal policy scares him](https://www.youtube.com/watch?v=w1YaS_lSAmw)

In this article, I explore the case that Buffett’s fears are not only justified, but that  
there is a viable way for investors to protect themselves - by considering Bitcoin as  
part of their investment portfolios.

How Much Value Has Money Lost?

*"The natural course of government is to make the currency worth*  
*less over time and that’s got important consequences."*  
— Warren Buffett, 2025 Berkshire Hathaway Annual Meeting

To illustrate how the value of money has dramatically fallen in value over time,  
consider how the US dollar has collapsed when priced in gold since the beginning of  
the twentieth century. (Of course, no graph exists for Bitcoin over this period).

![Gold graph](https://content.thebitcoinadviser.com/hs-fs/hubfs/Gold%20graph.png?width=903&height=554&name=Gold%20graph.png)  
Devaluation of USD vs Gold from 1900 to 2025 (source PricedInGold.com)

Note that in the 1930s, the reaction to the US government’s decision to devalue the  
dollar, following the Great Depression, by increasing the official price of gold and in  
August 1971, US President Richard Nixon’s decision to suspend the convertibility of  
the US dollar into gold following the breakdown of the Bretton Woods system (known  
as the "Nixon Shock"). Both resulted in sharp falls in the value of the dollar.

Furthermore, the relative value of the dollar in gold terms when valued from a 1900  
basis has fallen almost to zero.

Why Not Just Buy Gold Then?

It is true that gold has a long-standing reputation as a store of value, and deservedly  
so. But in the digital era, Bitcoin offers several important advantages.

Firstly, Bitcoin is not just sound money; it’s superior money technology. As economist  
John Maynard Keynes once famously called gold a “barbarous relic,” the description  
seems even more fitting today. Bitcoin is digital-native, borderless, and easy to  
transfer—features that make it more suitable for a modern, interconnected world.

Secondly, Bitcoin’s monetary policy is hardcoded, predictable, and transparent. Its  
supply is capped at 21 million “coins”, with issuance halving every four years. This  
means Bitcoin’s long-term inflation rate trends towards zero (and will eventually  
reach zero). Gold, in contrast, sees supply fluctuations due to mining activity and  
central bank actions, typically expanding around 1.5–2.0% per year.

Unlike fiat currencies or gold, both of which are often managed, stored, or  
manipulated by central authorities, Bitcoin is decentralised. No government or  
institution can unilaterally change its supply.

Moreover, Bitcoin enables unprecedented portability of capital. A memorised seed  
phrase (usually 12–24 words) can allow an individual to move substantial wealth  
across borders — a crucial advantage in times of crisis, political instability, or high  
inflation, again a distinct edge over physical and bulky gold.

From an investment perspective, Bitcoin has historically shown low correlation with  
traditional asset classes, enhancing diversification benefits. More significantly, it  
remains in its adoption phase, offering meaningful potential upside ahead as global  
understanding and usage increase.

And the performance? Since its inception, Bitcoin’s price trajectory has been  
unmatched. From less than one cent in 2009, at the time of writing it now trades  
above US$100,000 per coin. Whilst volatility remains high, the long-term trend is up  
and to the right, underscoring its disruptive power and untapped potential.

In short, Bitcoin builds upon many of gold’s virtues, while also addressing many of its  
limitations. For investors looking to hedge against fiat currency devaluation (aka  
inflation), Bitcoin offers a compelling alternative. This is not to discount gold entirely,  
but rather to highlight that Bitcoin offers a compelling, modern alternative fit for  
purpose in the new digital economy.

To illustrate the point further, the graph below shows how the value of Bitcoin has  
increased in value against the US dollar since 2010.

![Bitcoin versus USD](https://content.thebitcoinadviser.com/hs-fs/hubfs/Bitcoin%20versus%20USD.png?width=903&height=516&name=Bitcoin%20versus%20USD.png)

Bitcoin Price versus US Dollar (Source: BitBO)

Strategic Adoption: Nations and Corporates Move In

Bitcoin is increasingly being treated as a serious strategic asset.

In March 2025, the US government formalised the creation of a Strategic Bitcoin  
Reserve via an executive order under President Trump. This move positions Bitcoin  
as a form of "digital gold"; to strengthen economic resilience through its scarcity and  
decentralisation. The initiative is part of a broader digital-friendly policy framework,  
including lighter regulation and the appointment of Bitcoin advocate David Sacks to a  
senior advisory role.

Globally, other nations are starting to follow suit, examples of which include:

- Brazil recently (March 2025) launched a sovereign Bitcoin reserve to diversify  
  its holdings and strengthen independence from the US dollar. The aim is to  
  allocate up to 5% of its international reserves in Bitcoin.
- Russia has begun using domestically mined Bitcoin for international  
  transactions.
- A growing number of countries are exploring Bitcoin’s role as a reserve asset  
  to hedge against US dollar reliance and economic shocks.
- On the corporate side, Strategy (formerly MicroStrategy) continues to lead in  
  Bitcoin treasury adoption, having built its holding from since 2020. This model  
  is now being followed by others.
- In May 2025, GameStop acquired 4,710 bitcoins, marking its first major  
  Bitcoin initiative. Meanwhile, Japanese firm Metaplanet also added Bitcoin to  
  its balance sheet as a strategic reserve.

These developments signal a significant shift in general Bitcoin adoption: And Bitcoin  
is increasingly viewed as one of the building blocks of strategic financial planning—at  
both national, corporate, and individual levels.

How Much Bitcoin is “the Right Amount”?

Of course, there is no one or universal “right” potential allocation to Bitcoin that  
applies to all. Everyone has different needs, risk profiles, time horizons and other  
factors. However, it is illustrative to see how traditional asset allocations are currently  
constructed and how they may change as a framework for discussion.

Surprisingly, most traditional investment portfolios, such as diversified  
superannuation funds, currently allocate nothing to gold, let alone Bitcoin. But as  
perceptions change and general Bitcoin adoption continues to increase, I believe  
institutional demand and Bitcoin allocations will drive the Bitcoin price significantly  
higher.

To get a feeling for the status quo and how even small future allocations to Bitcoin  
could change demand, consider this chart from the Association of Superannuation  
Funds of Australia (ASFA), showing asset allocations across all Australian super  
funds as of June 2024 (the last reported financial year).

![Superannuation](https://content.thebitcoinadviser.com/hs-fs/hubfs/Superannuation.png?width=765&height=481&name=Superannuation.png)

Australian Superannuation System-wide Asset Allocation  
(source: ASFA per latest FYE – June 2024)

The appropriate Bitcoin allocation depends on an investor's personal financial  
circumstances, risk tolerance, understanding of the asset class and investment  
horizon, among other factors.

Unlike many traditional asset classes, Bitcoin is still considered high risk (despite its  
historical performance) and has high volatility. That’s why it's important to consult a  
suitably qualified and experienced financial advisor before making any investment  
decisions.

Two crucial considerations include:

- Willingness to bear risk: Can you emotionally and psychologically handle  
  the sharp ups and downs in price?
- Ability to bear risk: Can your financial situation support the potential of  
  losses on your investment?

Many investors start by allocating a small percentage, commonly between 1% and  
5%, of their portfolio to Bitcoin. This approach offers potential significant upside  
exposure while keeping risk manageable.

Crucially, do your own research. Learn how Bitcoin works, its technical foundations,  
and its economic implications. This will strengthen your conviction—or help you  
decide it’s not right for you.

Bitcoin may not be for everyone. No asset class is. But for those who understand  
and believe in its thesis, even a modest allocation may be worth considering.

Conclusion

Warren Buffett’s comments at the 2025 Berkshire Hathaway meeting shine a  
spotlight on an enduring concern: the persistent devaluation of fiat currencies. While  
gold has historically served as a hedge against this trend, Bitcoin represents a  
modern evolution of sound money principles, tailored for the digital age.

It combines scarcity, decentralisation, portability, and security, whilst also offering  
exposure to a growing network that is still in its early stages of global adoption.  
These features make it a unique asset class worth considering for those seeking  
protection from monetary debasement whilst benefitting from the potential upside  
from increased adoption.

That said, Bitcoin is not a guaranteed path to wealth, nor may it be suitable for every  
investor. There are no absolute guarantees in life. The decision to include Bitcoin in  
your portfolio should be based on thorough research, honest risk assessment, and  
personal financial goals.

Most importantly, and as highlighted earlier, consult a suitably qualified and  
experienced investment advisor before making any decision. A professional can help  
you determine whether Bitcoin may have a place in your strategy and if so, how  
much is appropriate for you.

Guest Writer: [Vincent Wales](https://www.linkedin.com/in/vincent-james-wales-ca-cfa-b92732/) 

About the author:

Vincent Wales holds the Chartered Financial Analyst (CFA) and Chartered  
Accountant (CA) designations and holds a Master of Finance (MAppAc) from the  
University of London. With a career spanning investment management, investment  
advisory services, and superannuation. He brings a thoughtful, research-driven  
perspective to modern investment challenges.

 

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