Matt Horne Recommends 1-5% Portfolio Allocation to Bitcoin

Fidelity Investments’ Matt Horne, head of digital asset strategies, recommends that investors allocate a small portion of their portfolios to Bitcoin, regardless of their investment in the decentralized currency. In a June 4 CNBC report, Horne addressed the analysis paralysis that many traditional investors and asset managers face when considering investing in Bitcoin and the digital asset market.

Horne explained that a small allocation, typically between 1% and 5%, would be sufficient to minimize risk if Bitcoin’s value drops to zero while still allowing investors to benefit from any potential gains and use it as an inflationary hedge. He stressed the need to grasp blockchain technology’s potential and adapt accordingly.

Horne’s comments show institutional investors’ interest in Bitcoin. This interest surged following the introduction of spot Bitcoin exchange-traded funds (ETFs) in the United States in January 2024, which propelled the asset to over $70,000 per coin.

According to the latest Coinshares Digital Asset Fund Flows report, Bitcoin funds experienced $148 million in inflows for the final week of May, with monthly total inflows for Bitcoin funds reaching nearly $2 billion in May alone. Since the start of 2024, Bitcoin funds and exchange-traded products have recorded over $14 billion in inflows.

The Coinshares report also mentioned that short Bitcoin funds also witnessed. $12.3 million in capital outflows for May, showing that ETF and ETP market sentiment for Bitcoin is still bullish. The report also found that there are over $74 billion invested in Bitcoins worldwide.

While institutional investors are paying more attention to Bitcoin and other crypto assets, Horne’s suggestion of investing just 1% of their portfolios on BTC may be more applicable at the moment. Investing in the right place helps investors benefit from the new-age asset and reduce associated risks.

Also read: Fidelity’s Spot Ethereum ETF Added to DTCC List; Awaits Regulatory Approval