<i>The <b>Bitcoin</b> Barbell Portfolio: A Canadian ETF Experiment</i>

Nassim Nicholas Taleb's barbell strategy involves dividing risk between two extremes rather than concentrating capital in the middle ground. Tony Dong, an experienced financial and crypto news writer, has applied this concept to a portfolio using Canadian-listed exchange-traded funds (ETFs). The Bitcoin barbell portfolio allocates 90% of its capital to short-term, high-quality Canadian fixed income and the remaining 10% to a Canadian-listed spot Bitcoin ETF.

Dong uses the Harvest Canadian T-Bill ETF (TSX:TBIL) for the safe allocation, which charges an MER of 0.11% and pays a current yield of 2.21%. For the risky side, he chooses the CI Galaxy Bitcoin ETF (TSX:BTCXB), which holds approximately $835 million in assets under management and has an MER of 0.68%

The updated backtest shows that the Bitcoin barbell portfolio produced a 16.82% compound annual growth rate (CAGR) from 2010 through 2026, ahead of the S&P 500 at 15.01%. The maximum drawdown was shallower at 26.26%, and its Sharpe ratio was higher at 1.23 compared to 0.82 for the S&P 500.