Fidelity believes investors should consider small Bitcoin exposure for long-term portfolios

Share This Post

Fidelity Investments believes that a modest Bitcoin (BTC) allocation could benefit investors regardless of their specific perspectives on the digital asset, CNBC reported.

The asset manager’s head of digital asset strategies, Matt Horne, made the statement on June 5 during the 2024 Vision conference.

Horne said that investors and advisors are diligently developing their crypto investment theories, but even a small portfolio allocation to Bitcoin can be prudent for many.

Persistent caution

Horne elaborated that many investment managers and advisors are currently formulating their thesis on Bitcoin and digital assets but have yet to invest in them. He said Bitcoin’s track record is evidence that even a small exposure can have major benefits for long-term portfolios.

According to Horne:

“Most investors are saving money, investing money with an advisor, to meet some longer-term goal [such as] retirement. A non-zero position in something like bitcoin could make sense for a lot of clients given a long-term horizon [and] position sizing that’s appropriate for their risk.”

Spot Bitcoin ETFs were introduced in the US market nearly six months ago. These funds were anticipated to be popular among advisors who preferred regulated investment vehicles for their high-net-worth clients.

However, many advisors remain cautious, citing high volatility, a lack of understanding, regulatory uncertainties, and the absence of an extensive track record as reasons for their hesitation.

Horne addressed these concerns, saying:

“We spend a lot of time arguing over the disruptive technology [thesis] or venture investing or digital gold and I think yes to all those is fine. What your thesis is is probably going to dictate position sizing and maybe where you source it from in a portfolio.”

Financial advisors generally recommend allocating a small portion, between 1% and 5%, to Bitcoin to introduce some risk to a portfolio without overwhelming it with the crypto market’s notorious volatility.

Horne said that even if Bitcoin price falls dramatically, a small exposure would not impact the broader portfolio. Meanwhile, any appreciation in Bitcoin’s value would have a significant benefit based on its historical performance, brief as it may be.

Brief history

Bitcoin’s journey began in 2009 when it was introduced by an anonymous figure known as Satoshi Nakamoto. Initially, it was largely overlooked by mainstream investors and remained within niche communities.

It wasn’t until around 2015 that Bitcoin started to gain significant attention from the broader financial community, marking the beginning of its meaningful tracking period.

Since then, the flagship crypto has experienced extreme volatility, massive price surges, and significant declines, making it a challenging asset to model and predict.

Horne said that despite bitcoin’s relatively brief history — approximately 15 years, with meaningful data only available since 2015 — it is important for investors to educate themselves about the asset due to its impact on the financial landscape.

According to Horne:

“You just have to understand why you might want to own this, understand the potential of this technology, and then position accordingly.”

However, he also cautioned that investors need to approach digital assets with a unique lens. Bitcoin’s unpredictable nature and short lifespan make it difficult to model with traditional financial tools.

The post Fidelity believes investors should consider small Bitcoin exposure for long-term portfolios appeared first on CryptoSlate.

Read Entire Article
spot_img
- Advertisement -spot_img

Related Posts

Best New Presales to Buy as Bullish Bitcoin Signal Promises Upcoming Bull Run

Bitcoin’s recent performance has sent shockwaves through the crypto market, with retail investors who bought the token at its peak particularly bearing the brunt of this downward push However,

Report: Bitcoin Miners Sitting on 100K BTC Fortune — But Owe $4.6B

According to a recent report, bitcoin mining companies privately run or traded on the stock market now hold over 100,000 BTC in their accounts But there’s a catch — these businesses

Chainlink (LINK) Among Top Gainers With 11% Daily Surge, Is A Rebound To $24 Coming?

After losing a key support level earlier this week, Chainlink (LINK) has surged 24% from the recent lows to lead Friday’s crypto market Some analysts suggested that a rebound could be around the

Bitcoin Open Interest Climbs 13% From Recent Low — Bull Run Restart?

After a torrid start to the week, the price of Bitcoin appears to be finally stabilizing and building some bullish momentum On Friday, March 14, the flagship cryptocurrency demonstrated this growing

ETF Weekly Recap: Bitcoin ETFs Lose Almost a Billion Dollars in 5th Successive Week of Outflows

Bitcoin ETFs experienced a net outflow of $9388 million, marking the fifth consecutive week of the outflow trend Similarly, ether ETFs also faced a net outflow of $17843 million, extending their

Is Bitcoin Peak In? This Data Suggests Otherwise, Analytics Firm Says

An analytics firm has explained how the data related to the stablecoins could hint at whether the Bitcoin market top is in or not Stablecoins Have Seen Their Market Cap Touch New Highs Recently In a