Bitcoin
Fidelity believes investors should consider small exposure to Bitcoin for long-term portfolios
Fidelity Investments believes that a modest Bitcoin The (BTC) allocation could benefit investors regardless of their specific outlook on the digital asset, CNBC reported.
The asset manager’s head of digital asset strategies, Matt Horne, made the statement on June 5 during the 2024 Vision conference.
Horne said investors and advisors are diligently developing their crypto investment theories, but even a small portfolio allocation to Bitcoin may be prudent for many.
Persistent care
Horne elaborated that many investment managers and advisors are currently formulating their theses on Bitcoin and digital assets, but have not yet invested in them. He said Bitcoin’s track record is evidence that even a small exposure can bring big benefits to long-term portfolios.
According to Horne:
“Most investors are saving money, investing money with an advisor, to achieve some long-term goal [such as] retirement. A non-zero position in something like bitcoin could make sense for many clients given a long-term horizon [and] position sizing appropriate to your risk.”
Spot Bitcoin ETFs were introduced to the US market almost six months ago. These funds were expected to be popular with counselors who preferred regulated investment vehicles for their high net worth clients.
However, many counselors remain cautiousciting high volatility, lack of understanding, regulatory uncertainty and lack of an extensive track record as reasons for their hesitation.
Horne addressed these concerns, saying:
“We spend a lot of time discussing disruptive technology [thesis] or venture investment or digital gold and I think yes to all of these is fine. What your thesis is will likely dictate position size and perhaps where you get it from in a portfolio.”
Financial advisors generally recommend allocating a small portion, between 1% and 5%, to Bitcoin to introduce some risk to a portfolio without burdening it with the crypto market’s notorious volatility.
Horne said that even if the price of Bitcoin fell sharply, a small exposure would not impact the broader portfolio. However, any appreciation in Bitcoin’s value would have a significant benefit based on its historical performance, however brief.
Brief history
Bitcoin’s journey began in 2009 when it was introduced by an anonymous figure known as Satoshi Nakamoto. Initially, it was largely ignored by mainstream investors and remained in niche communities.
It wasn’t until around 2015 that Bitcoin began to gain significant attention from the broader financial community, marking the beginning of its significant tracking period.
Since then, the flagship cryptocurrency has experienced extreme volatility, large price increases and significant drops, making it a challenging asset to model and predict.
Horne said that despite bitcoin’s relatively brief history – approximately 15 years, with significant data only available since 2015 – it is important for investors to educate themselves about the asset due to its impact on the financial landscape.
According to Horne:
“You just need to understand why you want to own this, understand the potential of this technology and then position yourself accordingly.”
However, he also warned that investors need to approach digital assets with a unique lens. Bitcoin’s unpredictable nature and short lifespan make it difficult to model with traditional financial tools.
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Bitcoin has lost out on an asset rally fueled by positive comments from the Federal Reserve, while a tight US election race casts doubt on whether Donald Trump will get the chance to implement his pro-crypto agenda.
The digital asset fell 2.4% on Wednesday, following a Fed-fueled surge in an index of megacap tech stocks Magnificent Seven by one of the largest margins in 2024. The token retreated further on Thursday, changing hands at $63,750 as of 6:10 a.m. in London.
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‘This is huge’ — Billionaire Mark Cuban issues ‘incredible’ Bitcoin and crypto prediction amid price slump
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came back with a vengeance this year when former President Donald Trump Cryptocurrency boosts US presidential election in November with ‘revolutionary’ plan.
The price of bitcoin has surged to more than its all-time high in recent months, surpassing $70,000 per bitcoin and triggering a wave of mega-optimistic predictions about the price of bitcointhough it fell again this week, falling below $65,000 after the Federal Reserve kept interest rates steady.
Now, as Elon Musk suddenly breaks his silence on bitcoin and cryptocurrenciesBillionaire investor Mark Cuban called a California plan to digitize 42 million car titles using blockchain an “incredible step forward” and “huge” for cryptocurrencies.
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Mark Cuban, famous Shark Tank investor and billionaire owner of the NBA team Dallas Mavericks, has… [+] called a cryptocurrency update “amazing” amid bitcoin’s price slump.
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The California Department of Motor Vehicles (DMV) has digitized 42 million car titles using blockchain, it was reported by Reuters, through technology company Oxhead Alpha on the Avalanche blockchain and designed to detect fraud and facilitate the securities transfer process.
“This is an incredible development for crypto,” Cuban, best known as an investor on TV’s Shark Tank and owner of the Dallas Mavericks NBA team, posted on X, joking that U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler could sue the state as part of his hostility toward cryptocurrencies and blockchain technology.
“The reason this is huge for crypto is because people who hold the tokens will have an app with an Avalanche wallet,” Cuban said. “Tens of millions of Californians having and using a crypto wallet in the next five years, or however long it takes, normalizes the use of wallets and crypto.”
John Wu, president of Avalanche developer Ava Labs, told Reuters that California’s DMV is “creating a wallet that you can download on your phone.”
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Bitcoin’s price has rallied this year, triggering a wave of bullish bitcoin price predictions from… [+] people like billionaire Mark Cuban.
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Last month, Cuban predicted that if the US dollar falls as the global reserve currency, bitcoin could become “a global ‘safe haven’” and a “global currency.” potentially sending the price of bitcoin to a much higher level.
According to Cuban, bitcoin could become what its most ardent supporters “envision” — a means “of protecting our economies… This is already happening in countries facing hyperinflation.”
The price of bitcoin has skyrocketed over the past year, largely due to the world’s largest asset manager, BlackRock, leading a bitcoin attack on Wall Street.
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At a national bitcoin conference in Nashville, Donald Trump finally laid out some of his crypto policy proposals, including a long-awaited part of his plan — building a strategic bitcoin reserve. CNN’s Jon Sarlin explains what it is and why the crypto industry wants it.
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