Matt Horne, the head of digital asset strategies at Fidelity Investments, is urging investors to include Bitcoin (BTC) in their investment portfolios, regardless of their stance on decentralized currency. In a report by CNBC on June 4, Horne highlighted the issue of analysis paralysis that many traditional investors and asset managers face when considering investing in Bitcoin and the digital asset market. He emphasized the importance of understanding the reasons for owning Bitcoin and the potential of the technology before making any investment decisions.
Horne suggested that a small allocation, typically between 1-5%, would be ideal to minimize risk if Bitcoin were to drop to zero, while still allowing investors to benefit from any potential upside and use it as an inflationary hedge. His comments reflect the growing interest from institutional investors and fund managers in Bitcoin and cryptocurrencies, which were initially disregarded by many large financial institutions until recently.
The introduction of spot Bitcoin exchange-traded funds in the United States in January 2024 sparked a surge in institutional interest in Bitcoin and other digital assets, driving the price of Bitcoin to over $70,000 per coin. According to the latest Coinshares “Digital Asset Fund Flows” report, Bitcoin funds received $148 million in inflows in the final week of May, with total monthly inflows for Bitcoin funds reaching nearly $2 billion in May alone.
Since the beginning of 2024, Bitcoin funds and exchange-traded products have attracted over $14 billion in inflows, while short Bitcoin funds experienced $12.3 million in capital outflows in May. This indicates that ETF and ETP investors maintain a positive sentiment towards Bitcoin. The Coinshares report also revealed that Bitcoin investment funds globally manage over $74 billion in assets.
In related news, there are plans for a Bitcoin “supercomputer” and BTC DeFi in the works, as reported in the Recursive inscriptions magazine.