A new research note from Charles Schwab is challenging a simple question many investors still ask: how much cryptocurrency is “right” for a portfolio. The answer, the firm argues, is less about prediction and more about psychology—specifically, how much volatility an investor can realistically live with.

The report focuses on exposure to Bitcoin and Ethereum, two of the most widely held digital assets. While they often enter portfolios as small “satellite” positions, Schwab finds they can behave like much larger holdings once risk is taken into account.

Even allocations as low as 1% to 3% can meaningfully reshape portfolio behavior, the analysis shows. That shift is not just…

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