An authorized major asset management firm offering Bitcoin exchange-traded funds (ETFs) to its clients suggests broadening their perspective on crypto assets by diversifying a portion of their wealth across the entire asset class, not just limited to Bitcoin.
Fidelity Investments advocates for four distinct ETF products categorized by risk levels. The ETF with the lowest risk holds 1% of assets in crypto.
Fidelity Investments Advocates Modest Crypto Allocations
Fidelity Investments is now allowing everyday investors to gain exposure to the overall cryptocurrency market at their own risk choice, ranging from 1% to 3%.
The first choice, offering the least exposure to crypto at 1%, is the Fidelity All-in-One Conservative ETF/Fund. It allocates 40% to equity investments, 59% to fixed income, and 1% to crypto.
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In contrast, the Fidelity All-in-One Balanced ETF fund tilts towards more equity investments at 59%, with fixed income at 39%, and crypto increasing to 2%.
The third option, the Fidelity All-in-One Growth ETF, emphasizes equity at 82%, fixed income at 15%, and crypto at 3%. Meanwhile, the fourth option, the Fidelity All-in-One Equity ETF, focuses predominantly on equity investments at 97%, with crypto allocation also at 3%.
What Do Other Asset Managers Think?
BlackRock also demonstrated a bullish stance on digital assets. Its 2022 annual report advised clients to consider exposure to Bitcoin. In its annual report that year, it advised that investors should allocate 84.9% to Bitcoin, 9.06% to stocks, and 6.04% to bonds.
Interestingly, this was long before the approval of its spot Bitcoin ETF (along with 10 others), which ultimately occurred on January 10, 2024.
Bitcoin mining company Blockware’s Joe Burnett agreed with the allocation suggestion:
“If all investors follow BlackRock’s optimal BTC allocation, Bitcoin will be worth more than 5x the total value of all equities, real estate, and bonds.”
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In its 2024 Big Ideas report, Ark Invest noted an optimal Bitcoin allocation for 2023.
“Our analysis suggests that allocating 19.4% to Bitcoin in 2023 would have maximized a portfolio’s risk-adjusted returns.”
SkyBridge Capital founder Anthony Scaramucci has also been talking up Bitcoin’s 2024 potential growth as a store of value asset similar to gold. In a recent CNBC interview, the financier highlighted gold’s $16 trillion market cap:
“I would make a case that it’s (Bitcoin) better than gold because it’s easier to move around. It should trade to at least half of that. It’s at a trillion dollars right now.”
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