- Fidelity’s Matt Horne advises a small Bitcoin allocation to minimize risk and maximize potential gains.
- Institutional interest in Bitcoin grows with significant inflows into Bitcoin funds and ETFs.
The head of digital asset strategies at Fidelity Investments, Matt Horne, is suggesting that investors include Bitcoin in a small percentage of their portfolios. Despite divergent investment theses on the decentralized currency, Horne’s advice emphasizes that even a modest investment can pay off.
Traditional Investors Face ChallengesÂ
Horne brought attention to an important problem that traditional investors and asset managers face in a June 4 CNBC story. This issue results from the lack of vast data for modeling that traditional assets have compared to digital assets like Bitcoin. He said:
“It is tough because a lot of professional investors can model out every asset class given the amount of data that is at our fingertips now… You lack the luxury of digital assets, but that is okay in my opinion.”
Horne clarified that recognizing the potential of digital assets is the secret to investing in them.
“That is why you just have to understand why you might want to own this, understand the potential of this technology and then position accordingly,” he said. He advised conservative allocation, usually between one and five percent.
Such an allocation is big enough to profit from any gains and serve as an inflation hedge, yet modest enough to reduce risk in the event that Bitcoin’s value falls to zero.
Institutional Interest and Fund InflowsÂ
Although many big financial organizations initially discounted Bitcoin and other cryptocurrency, Horne’s remarks show a growing interest in them among institutional investors and fund managers.
The latest statistics confirm this tendency. Bitcoin funds received $148 million in inflows during the final week of May, bringing the total for the month close to $2 billion, according to Coinshares’ “Digital Asset Fund Flows” report.
Current Bitcoin Market DataÂ
CoinMarketCap data show that the price of BTC as of writing is $71,080.74. It is now 3.07% higher than it was a day ago and 4.35% higher than it was seven days ago.
Furthermore, June 4 saw the second-largest single-day net inflow in history—$887 million—into Bitcoin spot ETFs overall, according to SosoValue.
Significantly, $28.1957 million was infused into Grayscale ETF GBTC, $379 million into Fidelity ETF FBTC, and $274 million into BlackRock ETF IBIT. Bitcoin spot ETF net asset value as of right now is $61.46 billion.
According to prior ETHNews reports, Bitcoin’s price is showing signs that are reminiscent of 2017 and may pump to $400,000.