Fidelity Report Says Portfolios Should Consider 5% Bitcoin Allocation
Fidelity Digital Assets recommended in a Tuesday report that investors “consider” diversifying 5% of their portfolios into bitcoin.
- A disciplined 5% would position investors to capitalize on bitcoin’s potential growth while protecting against losses, the cryptocurrency unit of the mutual fund giant wrote in its latest report on bitcoin’s investment thesis.
- “In a world where benchmark interest rates globally are near, at, or below zero, the opportunity cost of not allocating to bitcoin is higher,” the report said.
- Director of Research Ria Bhutoria wrote in her report, Fidelity’s latest on bitcoin’s investment thesis, that the crypto’s current market capitalization “is a drop in the bucket compared with markets bitcoin could disrupt.”
- Bhutoria argued that while institutional inflows may dampen bitcoin’s uncorrelated performance, the crypto is “fundamentally less exposed” to the “economic headwinds” that other assets will likely face.
- Bitcoin is therefore a “potentially useful” asset for uncorrelated return-seeking investors. “Consider a portfolio with a target allocation of 5% bitcoin,” she wrote.
- “In a world where benchmark interest rates globally are near, at, or below zero, the opportunity cost of not allocating to bitcoin is higher.
UPDATE: 20:42 UTC: Adds details from the report.
