Matt Horne, the head of digital asset strategies at Fidelity Investments, argues investors should allocate at least a small portion of their portfolios to Bitcoin (BTC), regardless of their investment thesis on the decentralized currency.
In a June 4 CNBC report, Horne alluded to the problem of analysis paralysis plaguing many traditional investors and asset managers when it comes to investing in Bitcoin and the digital asset market:
“It's tough because a lot of professional investors are able to 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," he added.
The Fidelity strategist explained that a small allocation, usually between 1-5%, would be small enough to minimize risk if Bitcoin drops to zero, but large enough to enjoy any upside from the digital currency and inflationary hedge.
Horne’s comments reflect heightened interest from institutional investors and fund managers toward Bitcoin and cryptocurrencies — technologies that were initially dismissed or written off by many large financial institutions until fairly recently.
Related: Warren Buffett’s Berkshire Hathaway did crash 99%... against Bitcoin since 2015.
Institutional interest in Bitcoin and other digital assets surged following the introduction of spot Bitcoin exchange-traded funds in the United States in January 2024, propelling the asset to over $70,000 per coin.
According to the most recent Coinshares "Digital Asset Fund Flows" report, Bitcoin funds experienced $148 million in inflows for the final week of May, with the monthly total inflows for Bitcoin funds totaling nearly $2 billion in May alone.
Since the start of 2024, Bitcoin funds and exchange-traded products have recorded well over $14 billion in inflows, while short Bitcoin funds experienced $12.3 million in capital outflows for May — indicating that market sentiment among ETF and ETP investors remains positive for Bitcoin.
The Coinshares report also noted that Bitcoin investment funds account for over $74 billion in assets under management globally.
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