The recent set of data that Fidelity released is quite interesting. I took a look at their analysis of traditional investment portfolios. The classic 60/40 allocation (60% stocks and 40% bonds) had an annualized return of about 9.4% over the past 10 years. But if you just add 3% Bitcoin, the return can actually rise to 14.6%—and that improvement is pretty noticeable.

Fidelity’s data shows that adding Bitcoin does bring some changes. Annualized volatility increases from 10.26% to 12.04%, while the Sharpe ratio actually improves from 0.72 to 1.01—meaning risk-adjusted performance is better overall. Maximum drawdown widens from 20.64% to 21.79%, but the increase isn’t that large. It looks like Fidelity’s point is that an appropriate allocation to Bitcoin can improve overall investment performance.

If you’re a bit bolder and raise Bitcoin’s allocation to 10%, the annualized return can jump to 24.09%, but volatility also climbs to 18.41%, and the maximum drawdown expands to 26.72%. This is the typical high-risk, high-reward setup. For Fidelity, a traditional financial giant, to produce analysis like this provides some indication that mainstream institutions are changing their views on Bitcoin’s role in investment portfolios.