Investment banks suggest a 1% Bitcoin allocation; institutions are optimistic in the long term, which may boost BTC's status.

Recently, a strategy analyst from an investment bank released a report suggesting that investors could allocate 1% of a diversified asset portfolio to Bitcoin to enhance the overall efficiency of the portfolio. These analysts believe that Bitcoin can serve as a hedging tool that is uncorrelated with market trends.

However, when we compare Bitcoin with the S&P 500 Index, it is difficult to draw such a clear conclusion. According to statistics from a certain data platform, the current correlation coefficient between the two markets is 0.134, which is relatively low. However, it is worth noting that during the significant market downturn in March 2020, the correlation between the two once climbed to 0.54. This increase in correlation during times of severe market volatility indicates that the two markets are still somewhat connected.

This week, major markets generally experienced significant declines. The S&P 500 index fell by 2.45%, while Bitcoin dropped by 15%. Despite this, many large companies are still actively increasing their holdings of Bitcoin. Reports say that a well-known cryptocurrency exchange has been holding Bitcoin on its balance sheet since 2012. At the beginning of this month, an electric vehicle manufacturer also announced the purchase of $1.5 billion worth of Bitcoin.

At the same time, the aforementioned investment bank has recently begun to focus on digital assets and views Bitcoin as an investment similar to gold. A member of the bank's global markets team even stated that as investors gradually shift towards alternative investments such as cryptocurrencies, gold ETFs may face the risk of capital outflows.

These signs indicate that, despite significant market volatility in the short term, institutional investors' long-term optimistic view on Bitcoin has not changed. As more traditional financial institutions begin to focus on and study digital assets, Bitcoin's position in investment portfolios may further improve. However, investors should still carefully assess the risks associated with its high volatility when considering adding Bitcoin to their portfolios.