Matt Horne, head of digital asset strategies at Fidelity Investments, says most investors should have allocation in Bitcoin regardless of their market thesis.
Horne alluded to the issue of analysis paralysis that besets several conventional investors and asset managers regarding Bitcoin and the digital asset market in a report published on June 4 for CNBC.
“It’s tough because a lot of professional investors can model out every asset class given the amount of data that’s at our fingertips now. With digital assets, you don’t have the luxury… and I think that’s fine.”
“That’s why you just have to understand why you might want to own this, understand the potential of this technology, and then position accordingly,” according to him.
A modest allocation, typically between 1% and 5%, the Fidelity strategist explained, would mitigate risk if Bitcoin falls to zero while providing an adequate amount of upside to benefit from the digital currency and inflationary hedge.
Horne’s remarks demonstrate increased attention from institutional investors and fund managers regarding Bitcoin and cryptocurrencies. Before the recent past, numerous major financial institutions disregarded these technologies.
The asset experienced a significant increase in value, exceeding $70,000 per coin after the January 2024 launch of spot Bitcoin exchange-traded funds in the United States, which sparked institutional interest in Bitcoin and other digital assets.
Based on the most recent “Digital Asset Fund Flows” report by Coinshares, Bitcoin funds witnessed a monthly total of inflows of nearly $2 billion in May, or $148 million, during the final week of the month.
Bitcoin funds and exchange-traded products have witnessed capital inflows exceeding $14 billion since the commencement of 2024. In May, short Bitcoin funds witnessed capital outflows amounting to $12.3 million, suggesting that investor sentiment towards Bitcoin remains favorable within the ETF and ETP markets.
Additionally, Bitcoin investment funds administer more than $74 billion in assets worldwide, according to the Coinshares report.
