"Korbit Research Recommends Optimal Institutional Portfolio: 73% Bitcoin, 27% Ether"

**Korbit Research Unveils Enhanced Crypto Asset Allocation Strategy for Institutional Investors** Korbit Research Center, linked to South Korean cryptocurrency exchange Korbit, has released an updated report titled "Crypto Asset Allocation Strategy 2.0 for Institutional Investors." This edition, launched on October 24, builds on the initial February 2022 report, incorporating recent market trends and regulatory changes in the cryptocurrency sector. The report spotlights [Ethereum (ETH)](https://api.blockmedia.co.kr/binance/outlink/?path=ethereum) as a vital asset for institutional portfolio diversification. It highlights Ethereum’s multifunctional role beyond just a store of value. Ethereum acts as a hybrid asset, offering transaction fee-based consumption, staking rewards, collateral for decentralized finance (DeFi), and advanced liquidity and security through restaking. The analysis positions Ethereum as a fundamental pillar in the emerging web3-based digital financial ecosystem. **Bitcoin and Ethereum Enhance Traditional Portfolio Risk-Return Profiles** The report explores the benefits of integrating [Bitcoin (BTC)](https://api.blockmedia.co.kr/binance/outlink/?path=bitcoin) and Ethereum into traditional portfolio models like the 60:40 stock-to-bond ratio. Findings suggest that allocating up to 8% of these cryptocurrencies can significantly boost portfolio performance, with the Sharpe ratio climbing from 0.87 to 1.74. This indicates that BTC and ETH provide unique risk premiums with low correlation to traditional assets, making them strategic additions rather than just high-risk options. Despite a slight increase in maximum drawdowns, the report recommends quarterly rebalancing to effectively manage risks while maximizing returns. "Integrating Ethereum into portfolios is more than a simple investment; it represents a strategic approach to the future of digital financial infrastructure," said Yoon-Young Choi, head of Korbit Research Center. "Strategic allocations of Bitcoin and Ethereum can enhance expected returns relative to risk, presenting a forward-looking strategy for institutional portfolios." **Optimal Allocation: 73% Bitcoin, 27% Ethereum** The report examines optimal allocation strategies within crypto portfolios, concluding that a mix of 73% Bitcoin and 27% Ethereum achieves the highest Sharpe ratio of 1.49. This combination outperforms portfolios entirely made up of Bitcoin (1.28) or Ethereum (0.92). Even a 50:50 BTC and ETH mix yields a Sharpe ratio of 1.43, underscoring the benefits of diversification in the crypto space. Korbit Research emphasizes Ethereum’s unique strategic importance in supporting a smart contract-based ecosystem, complementing Bitcoin's market position. "Institutional investors should perceive Ethereum not merely as a speculative asset but as a critical component of financial systems," the report stresses. By delivering data-driven insights, the report highlights the potential for cryptocurrencies to transition from niche investments to core elements of institutional portfolios, marking a shift in asset allocation strategies.