Head of Digital Asset Strategies at Fidelity Investments, Matt Horne, is urging investors to include Bitcoin in their investment portfolios, regardless of their stance on decentralized currencies. Horne highlighted the issue of analysis paralysis that plagues traditional investors and asset managers when it comes to investing in Bitcoin and the digital asset market. He emphasized the importance of understanding the reasons behind owning Bitcoin and the potential of its technology before making investment decisions.
Horne suggested allocating a small portion, typically between 1-5%, to Bitcoin. This allocation would be small enough to minimize risks in the event that Bitcoin becomes worthless, but large enough to benefit from any potential upside and serve as an inflationary hedge.
Horne’s remarks reflect the growing interest from institutional investors and fund managers in Bitcoin and cryptocurrencies. These technologies were initially dismissed by many financial institutions, but have gained traction in recent years.
The introduction of spot Bitcoin exchange-traded funds in the United States in January 2024 sparked increased institutional interest in Bitcoin and other digital assets. This surge in interest propelled Bitcoin’s price to over $70,000 per coin.
According to the recent Coinshares “Digital Asset Fund Flows” report, Bitcoin funds saw $148 million in inflows in the final week of May. The total inflows for Bitcoin funds in May alone amounted to nearly $2 billion. Since the beginning of 2024, Bitcoin funds and exchange-traded products have recorded over $14 billion in inflows, indicating positive market sentiment among ETF and ETP investors.
The report also highlighted that Bitcoin investment funds globally manage over $74 billion in assets.
In related news, there are plans for a Bitcoin ‘supercomputer’ and BTC decentralized finance (DeFi) to be launched soon.