Philippe Laffont said Bitcoin is becoming a core portfolio asset as its volatility drops

Philippe Laffont, founder of Coatue Management, told attendees at Coinbase’s State of Crypto Summit in New York City on Thursday that Bitcoin is becoming a serious part of traditional portfolios as its once-wild volatility continues to drop.

The hedge fund boss said he believes the asset is moving from speculative territory into something more foundational, with price behavior starting to look closer to legacy markets.

Laffont explained that Coatue had initially avoided bitcoin because of how unstable it used to be. But now, the math is changing. “It’s intriguing to me that maybe … the cost of getting into bitcoin is shrinking,” he said.

“If the beta shrinks, that would be very interesting.” The term beta is used to compare an asset’s volatility to the broader market.

Institutions buy in as behavior of holders changes

Laffont pointed out that Bitcoin has climbed almost 13% so far in 2025. That’s not what stood out to him, though. What mattered more was how price movements now feel more controlled than in previous years.

In 2022, bitcoin lost more than 60% of its value while the Nasdaq Composite dropped 33%. It was one of those years that kept Coatue on the sidelines.

Fast forward to April 2025, after President Donald Trump announced new tariffs, and the picture looked very different. From April 2 to April 10, bitcoin dropped about 5%, while the Nasdaq fell over 6%. That’s the kind of performance that signals a maturing asset.

He said this improvement in behavior wasn’t just about price. It’s about the people holding it. Laffont noted that there’s been a sharp decline in the number of bitcoin wallets that sell their entire holdings after just one month.

“That’s come down a lot,” he said. Instead of trading in and out, more holders are staying in for the long run. That’s a critical change in market dynamics, especially when it comes to institutional comfort.

Another sign of that change? Big names are getting involved. Laffont mentioned BlackRock, saying the firm played a leading role in bringing bitcoin ETFs to the market. That kind of participation wasn’t possible until recently. Now that the biggest asset managers are getting behind it, more institutions are following.

Laffont believes this is pushing bitcoin toward becoming a necessary part of portfolios. He said the asset only represents about $2 trillion out of the world’s $500 trillion in total wealth. That’s still a tiny share. But if people keep valuing it, he argued, it “has to become more central.” The growth potential, by his measure, is still huge.

Laffont admits missing the early wave and tells others not to overdo it

Coatue hasn’t stayed completely out of crypto. Laffont said the firm has investments in both private and public companies in the space, including Dune Analytics, Hut 8, and CoreWeave. CoreWeave, an AI infrastructure firm, works with bitcoin miner Core Scientific.

Still, Laffont made it clear he regrets not going deeper into bitcoin itself. “Every night, I wake up at about three in the morning and I go, ‘What an idiot. Why didn’t I invest more in bitcoin?’” he said.

He blamed his delay on overthinking. Laffont said he used to focus too much on complex theories and debates about use cases. But the core truth was simple: value grows when people believe in it. “As long as other people think it’s valuable, it gets more valuable over time – and that’s what we missed,” he said.

Now, he said he tells investors to consider putting “one or two or 3% or 4%” of their assets into bitcoin as a way to protect themselves from inflation.

He also described how his clients fall into three groups. There are the ones who trust him and don’t ask questions. Then there are the ones who confront him with “Why did you miss one of the biggest trends in the world?”

And finally, there are the cautious ones who are still uncomfortable with anything crypto-related. “That,” Laffont said, “is the dying population.” He said those people are getting fewer every year.

Even as Laffont has warmed up to bitcoin, he still warned people not to make it the center of their portfolios. “For those of you that think bitcoin is going to be important, my recommendation is never make it such a big portion of your portfolio that it becomes the driving factor of the portfolio,” he said.

His advice is to keep it small and steady. “You’re going to make way more money by having a smaller position that you can keep for 10 years than the big one that worries you all the time.”