Bitcoin is trading well below its highs from earlier this cycle, and advisors are fielding a very specific kind of question right now: is this the moment to buy in, the moment to get out, or a moment to do nothing at all?
We believe this is typically the wrong starting point for most of the investors we talk to. A more useful one, especially for someone who isn’t starting from scratch, is: how does a hedged Bitcoin strategy fits with a portfolio that already exists?
Almost nobody is building a portfolio from a completely blank slate. Generally speaking, investors already hold some mix of equities, bonds, alternatives, and sometimes a tactical or volatility strategy. Our goal is to determine whether, and where, a hedged Bitcoin strategy like the Fortuna Hedged Bitcoin ETF (HBTC) belongs relative to what’s already there.
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The answer will always depend on the individual, although we have identified a few investor types based on the conversations we often find ourselves in. Each investor type comes with a general opinion about this current moment and its place in the longer Bitcoin’s cycle.
Bitcoin Right Now: A Pullback, Not a Verdict
We won’t pretend to know whether this pullback is nearly over or has further to go, and we’d be skeptical of anyone who tells you they do. Bitcoin’s history has shown us that quiet, uncomfortable stretches like this one have often preceded its sharpest run-ups. Advisors used to talk about $100,000 the way many now talk about $150,000: a number that felt far off…right up until it wasn’t. And we realize that this pattern has cut both ways. We believe that inventors should, in periods like this, stay thoughtfully positioned. Though this might be a boring stretch, we don’t see any signals that this particular pullback is about to turn.
Here’s how we believe three distinct investor-types tend to use moments like this – when they’re treating a post-drawdown moment as neither a green light nor a red one.
The Diversifier With No Crypto Exposure Yet
For investors who don’t currently hold any Bitcoin or crypto-related assets, we believe that HBTC is an excellent first conversation. HBTC pairs exposure to Bitcoin-related securities with an options-based overlay designed to help hedge against sharp declines instead of providing access to the asset with an uncushioned bet on price direction.
Advisors in this camp often discuss HBTC as a candidate for the alternatives portion of a portfolio, a way to introduce Bitcoin-linked exposure without asking a client to abandon the risk-management principles the rest of their portfolio is built on.
Right now, this investor is usually less focused on timing an entry and more focused on whether a smaller, hedged position lets them start building familiarity with the asset class without staking a full-sized bet on where Bitcoin goes next. Waiting for a “clearer” market is its own decision, not a neutral one, since it also means waiting through whatever upside comes first.
The Crypto-Curious, But Cautious
Some investors have watched Bitcoin’s bigger runs from the sidelines. They’re interested in the upside, but they’ve also seen what a steep single-month decline looks like, and that’s kept them out. This is the group behind one of our core beliefs: you don’t have to be a crypto evangelist to see the opportunity in Bitcoin’s volatility. HBTC’s protective puts, paired with call spreads designed to help offset the cost of that hedge, are built with exactly this investor in mind: someone who wants to participate in Bitcoin’s price movement without signing up for its full range of outcomes.
After a pullback, this is often the investor asking whether a hedged structure changes the risk of getting in at an uncomfortable time. HBTC’s options overlay is designed to limit how much a poorly timed entry can hurt.
The Options-Savvy Tactical Allocator
Advisors who already run momentum, volatility, or tactical macro sleeves tend to approach HBTC differently than the first two groups. They’re already comfortable with options and derivatives as everyday portfolio tools, so the conversation isn’t “should I use options?” as much as “how does this specific implementation compare to what I’m already doing?”
HBTC applies a disciplined, systematic options process, including monthly repositioning, protective puts, and call spreads used to help offset hedging costs, specifically to Bitcoin-related securities. The ETF vehicle also provides intra-day liquidity and holdings transparency within the exchange-traded structure.
For this investor type, current volatility is less of a signal for immediate action, and more a model input. Elevated volatility generally raises options premiums, which can change the cost and structure of a hedge going forward. This group makes technical considerations using their own process and aren’t looking to us for market calls.
The Already-In Investor Looking to Restructure
Then there’s the investor who already owns a crypto-related ETF or has direct Bitcoin exposure. Their question isn’t usually whether to add Bitcoin, but whether some of what they already own should be structured differently. For this investor, HBTC provides a way to convert part of an existing position into something with built-in downside management.
For an investor sitting on an unhedged position after a drawdown, the focus often becomes whether the position they already hold should carry a hedge going forward, regardless of where price goes next.
Sizing It Right, Whoever You Are
Across each of these investor types, the sizing conversation tends to rhyme: have enough exposure to Bitcoin that they can enjoy the upside if it has one of its outsized runs, but not so much exposure that this single position defines the whole portfolio. We’ve written before about how to think through that math in more detail, but the short version is that the right number depends on each client’s own risk tolerance and time horizon. There’s no hard-and-fast rule of thumb that we’d hand out here.
Where Do You See Yourself?
Whether you see yourself in one of these groups or a bit of several, the underlying question is the same: not “do I believe in Bitcoin,” but “does a risk-managed way to hold Bitcoin make sense adjacent to the portfolio I’ve already built.” We believe that what each investor type can reasonably do right now is decide how they want to be positioned for the next move – whichever direction it comes from – rather than trying to predict it.
If you want to talk through where HBTC might fit for your clients, reach out. We’re always happy to walk through the mechanics in more detail.
Mark Adams
CIO & Co-Founder, Fortuna Funds
