Fidelity executives say most investors should have some allocation to Bitcoin.

Matt Horne, head of digital asset strategy at Fidelity Investments, argues that investors should allocate at least a portion of their portfolio to Bitcoin (BTC), regardless of their objective in investing in the decentralized currency.

In a June 4 CNBC report, Horne cited the problem of analysis paralysis that plagues many traditional investors and asset managers when investing in Bitcoin and digital asset markets.

“Given the amount of data we have at our fingertips today, it is difficult for many professional investors to model every asset class. There’s no luxury with digital assets… I think that’s okay.”

“So you need to understand why you want to own this, understand the potential of this technology and position yourself accordingly,” he added.

The Fidelity strategist explained that a small allocation, typically between 1% and 5%, is small enough to minimize risk if Bitcoin falls to zero, but large enough to benefit from the digital currency and inflation hedge.

Horne’s comments reflect the growing interest of institutional investors and fund managers in Bitcoin and cryptocurrencies. This technology was initially dismissed or discarded by many large financial institutions until fairly recently.

Related: Warren Buffett’s Berkshire Hathaway has fallen 99% against Bitcoin since 2015..

Since the introduction of the Bitcoin spot exchange-traded fund in the United States in January 2024, institutional interest in Bitcoin and other digital assets has surged, with the asset soaring to more than $70,000 per coin.

According to the most recent Coinshares “Digital Asset Fund Flows” report, Bitcoin funds experienced inflows of $148 million in the last week of May, with total monthly inflows for Bitcoin funds falling nearly in May alone. It reached $2 billion.

Since the start of 2024, Bitcoin funds and exchange-traded products have seen inflows of over $14 billion, while short Bitcoin funds have experienced capital outflows of $12.3 million in May. This indicates that market sentiment among ETF and ETP investors remains positive towards Bitcoin.

The Coinshares report also noted that Bitcoin investment funds account for more than $74 billion of assets under management globally.

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