Bitcoin: A Framework for Institutional Investors Considering an Allocation

Fidelity
By October 16, 2021 15:11

Bitcoin: A Framework for Institutional Investors Considering an Allocation

New research from Fidelity explores bitcoin’s characteristics, potential benefits and risks, and other implementation considerations 

KEY TAKEAWAYS

  • We believe bitcoin is an aspiring asset class in a period of price discovery.
  • Like gold, bitcoin is a high-powered, opportunistic hedging asset that may be useful in certain regimes to offset aggregate states such as monetary inflation.
  • However, bitcoin has characteristics of a venture investment with persistent volatility and equity-like risk; it is prone to speculation and valuation risk.
  • Institutions should keep in mind some potential obstacles to adoption, including government/regulatory scrutiny, transparency questions, ESG concerns, and volatility.
  • In this research, we explore scenarios that should be in place to support institutional portfolio exposure, as well as those that could accelerate or prevent institutional adoption.

Fidelity
By October 16, 2021 15:11

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