Bitcoin has matured over the years and has become more widely accepted as an investment option among institutional investors.
Bitcoin (BTC +0.66%) It has been a popular investment among individual investors for many years. It has gained a reputation of being a risky and speculative investment that is not suitable for most investors, but over time, more and more people have become comfortable with the idea of holding it in their portfolio, especially as Bitcoin has become less volatile.
One prominent financial leader who recently changed his view on Bitcoin is BlackRock CEO Larry Fink. While he previously seemed to discount major cryptocurrencies, he now understands why investors want to include them in their portfolios.
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Bitcoin as a “fear asset”
In a recent press conference, Fink called Bitcoin a “fear asset” and suggested people buy it for safety reasons. “You own Bitcoin because you fear for your physical security. You own Bitcoin because you fear for your financial security.” But back in 2017, he believed this was primarily for criminals looking to launder money.
Fink’s comments confirm the growing acceptance of Bitcoin as a legitimate asset for investors to hold in their portfolios as a way to diversify and perhaps reduce overall risk in the market. Despite question marks over the economy, it rose to record levels in 2025. Therefore, we can see that there may be a correlation between fear and the increase in Bitcoin’s value.
Fear Doesn’t Always Lead to Bitcoin Price Rise
The problem I see with Mr. Fink’s statement is that Bitcoin hasn’t actually proven to be a safe investment for investors who are worried about the market. If so, we would see evidence of an inverse relationship with the S&P 500 during difficult times. If Bitcoin is truly an asset that people turn to in times of trouble, like gold, then it should do better when the index as a whole is struggling.
But that wasn’t the case. In 2022, the S&P 500 collapsed 19% due to economic uncertainty, rising inflation, and a variety of macroeconomic issues. Investors didn’t turn to Bitcoin out of fear. Instead, they collectively threw it away. That same year, cryptocurrencies fell by a whopping 65%. We can also look to the final quarter of 2025, when the S&P 500 briefly experienced a downturn, but will eventually recover. During the quarter, Bitcoin plummeted 23%, but ended up rising 2%. The idea that fear is a positive catalyst for Bitcoin, as suggested by Fink and other investors, does not appear to be borne out by the returns.
Today’s changes
(0.66%) $596.25
current price
$90846.00
Key data points
Market capitalization
$1.8 trillion
daily range
$89343.00 – $91361.00
52 week range
$74604.47 – $126079.89
volume
43B
Bitcoin has matured but is still extremely dangerous
Bitcoin has grown in popularity over the past few years and has clearly captured the hearts of many retail investors. But that doesn’t mean it’s now a safe asset to hold in your portfolio. Diversification for the sake of diversification or simply owning different types of assets won’t necessarily protect you from a recession. As Bitcoin’s performance in 2022 shows, it can increase overall risk and introduce a new problem that you may not have had to worry about before: volatile crypto markets.
After all, Bitcoin remains a highly speculative asset, and its valuation is difficult to tie to any metric, making it difficult to predict future performance. That’s why I believe the majority of investors should avoid it.
If you are bullish on cryptocurrencies, can tolerate the volatility associated with Bitcoin, and can tolerate the risk, it may make sense to hold a small position in your portfolio. But just because smarter people seem to be talking favorably about it (perhaps because they don’t want to seem disconnected from retail investors) doesn’t mean it’s become a safe asset to hold or that it can somehow reduce risk in your portfolio.
