Smart Portfolio Dumb Portfolio

So, when I wrote in yesterday's market update that a bitcoin ETF could happen tomorrow, I didn't mean it literally. Yet, it seems that an asset manager in California may have just found a way to squeeze one past the US authorities.

The new proposal from Reality Shares is a bit different from the previously filed bitcoin ETF applications in that it limits the maximum exposure of bitcoin to 15% of the total portfolio. 

By creating a well-diversified portfolio that contains several different currencies and other stable assets, investors in this ETF would be more protected from the volatility inherent in the crypto market as well as from any sort of market manipulation that the SEC seems so concerned about.

This is exactly what we've been recommending here at eToro for some time now. In our view, investors should be able to limit their risk by diversifying their portfolio into many different assets and keeping the exposure to the high-risk assets to a small portion of their account.

Personally, I'm amazed that it took this long for someone to make such a proposal. In retrospect, this probably should have been a line of conversation with the authorities from the very beginning and it will be interesting to see how they respond.

Traditional Markets

Things on the geopolitical front seem to be accelerating at a brisk pace in a good way. 

With three days left to another potential US government shutdown, it seems like the authorities are closing in a possible deal. Hopes are high that a deal could be signed, even though it contains only a fraction of the money that the President wanted for border security and there hasn't been any official word from the White House just yet on whether Trump will agree to this deal or not.

In addition, there is continued progression on the US-China trade talks with US representatives Stephen Mnuchin and Robert Lighthizer due in Beijing on Thursday. Reportedly, there is interest from the leaders of the two nations for a meeting, but no indication on when that might happen.

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Please note: All data, figures & graphs are valid as of February 12th. All trading carries risk. Only risk capital you can afford to lose.

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