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HomeCryptoFidelity advises investors to allocate a small amount of capital to Bitcoin

Fidelity advises investors to allocate a small amount of capital to Bitcoin

Fidelity Investments believes that small allocations to Bitcoin (BTC) and asset portfolios can benefit investors, regardless of their specific views on digital assets.

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

Horne said that investors and advisors are developing their crypto investment theories, but many are cautious about even investing a small amount in Bitcoin.

Be patient and cautious

Horne further explained that many investment managers and advisors are currently building their thesis on Bitcoin and digital assets but are not yet investing in them. Bitcoin, he said, is proof that even a small investment can bring big benefits to a long-term investment portfolio.

“Most investors are saving money, investing capital through advisors to achieve some long-term goal such as financial freedom. Investing a small amount of capital, with the right position size and risk, in something like Bitcoin could make sense for many clients with a long-term view.”

Bitcoin spot ETF was introduced in the US market almost six months ago. These funds are predicted to become popular among advisors, who prefer to invest capital from their high net worth clients in managed vehicles.

Still, many advisors remain cautious, citing high volatility, lack of understanding, regulatory uncertainty and lack of a track record as reasons for their hesitation.

“We spend a lot of time arguing about disruptive technology or venture capital or digital gold and personally agree that they are all fine,” Horne said. An investor’s thesis will likely determine the size of a position in an asset portfolio.”

Financial advisors often advise investors to allocate a small portion, between 1% and 5%, to Bitcoin to take some risk into their portfolio without exposing it too much. by the notorious volatility of the cryptocurrency market.

Horne said that, even if the price of Bitcoin drops significantly, the small exposure will not affect other investments. Meanwhile, any increase in Bitcoin’s value would yield significant gains, based on past performance.

Bitcoin Summary

Bitcoin’s journey began in 2009 when it was introduced by an anonymous figure named Satoshi Nakamoto. Initially, BTC was largely ignored by mainstream investors and remained in niche communities.

It wasn’t until around 2015 that Bitcoin began to receive significant attention from the broader financial community, marking the beginning of its watch period.

Since then, the leading cryptocurrency has experienced extreme volatility, sharp price increases and decreases, making it a challenging asset to model and predict.

Horne says that, despite its relatively short history of only about 15 years, with meaningful data going back to 2015, it is important for investors to educate themselves about the asset given its impact on with financial context.

“Investors just need to understand why they want to own Bitcoin, understand the potential of this technology and then enter with the right position.”

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

You can see coin prices here.

Viet Cuong

According to CryptoSlate

Mark Tyson
Mark Tyson
Freelance News Writer. Always interested in the way in which technology can change people's lives, and that is why I also advise individuals and companies when it comes to adopting all the advances in Apple devices and services.
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