Part 6/8:
Understanding MPT enables individuals to form a coherent strategy regarding asset allocation based on long-term objectives. For instance, one could choose to remain wholly invested in cryptocurrencies or maintain a cash allocation, adjusted according to market sentiment and personal appetite for risk.
The crux of investing—from an MPT perspective—lies in recognizing opportunity costs. Every dollar diverted to an alternative asset is a dollar not invested in Bitcoin, which continues to show a dominant performance in the cryptocurrency market cycle. This observation can encourage investors to weigh potential short-term gains against long-term stability.