Matt Horne, the head of digital asset strategies at Fidelity Investments, argues that investors should consider allocating a small portion of their portfolios to Bitcoin, regardless of their investment strategies on the decentralised currency.
In a CNBC report on June 4, Horne addressed the challenge traditional investors face with Bitcoin and digital assets:
“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.
Horne explained that a small allocation, usually around 1-5%, would be sufficient to benefit from Bitcoin’s potential upside while minimising risk if its value drops to zero.
Horne’s advice reflects a broader trend of increasing interest in Bitcoin and cryptocurrencies among institutional investors and fund managers, who initially dismissed these technologies. This shift in sentiment gained momentum following the introduction of spot Bitcoin exchange-traded funds (ETFs) in the United States in January 2024, which propelled Bitcoin’s price above $70,000 per coin.
According to Coinshares’ “Digital Asset Fund Flows” report, Bitcoin funds saw $148 million in inflows in the final week of May, with total inflows for the month reaching nearly $2 billion.
Since the beginning of 2024, Bitcoin funds and exchange-traded products have accumulated over $14 billion in inflows, while short Bitcoin funds experienced $12.3 million in outflows in May, indicating a positive market sentiment among ETF and ETP investors.
The report also highlighted that Bitcoin investment funds manage over $74 billion in assets globally.