Bitcoin becoming 'more central’ to portfolios as its volatility cools, Coatue's Philippe Laffont says

While investors may have been put off by bitcoin's volatility in its early years, a few factors are emerging that will make the flagship crypto a key part of a portfolio, according to Coatue Management's Philippe Laffont.

The founder of the tech-focused hedge fund spoke Thursday at Coinbase's State of Crypto Summit in New York City.

For starters, while bitcoin has managed to surge nearly 13% in 2025, Laffont said that the cryptocurrency's volatility has come down over time. Bitcoin's dramatic price swings have been a deterrent for potential investors in the crypto – and at one point, this volatility kept Coatue from getting into bitcoin, he said.

"It's intriguing to me that maybe … the cost of getting into bitcoin is shrinking," Laffont said on stage Thursday at Coinbase's State of Crypto Summit in New York City. "If the beta shrinks, that would be very interesting." Beta is a measurement of an asset's volatility compared to that of the market.

Institutional investors' move to embrace bitcoin was also a sign of maturity for the cryptocurrency, he said. Consider that BlackRock was one of the leaders of the charge to bring bitcoin ETFs to market.

Bitcoin via Coin Metrics over the past year

Further, Laffont pointed out bitcoin's performance in 2022 and how it has changed over time. The flagship cryptocurrency fell more than 60% in 2022, while the Nasdaq Composite dropped 33%. In contrast, from April 2 to April 10 — the days following the announcement of President Donald Trump's tariffs — bitcoin retreated about 5% and the Nasdaq fell more than 6%.

Additionally, the number of bitcoin wallets that have held the crypto for at least a month and sell their full position has come down "a lot," Laffont said, which suggests investors are holding onto the crypto for the long term rather than trading it.

Bitcoin accounts for a small amount of the world's net worth – about $2 trillion out of $500 trillion, he said. If one assumes bitcoin will continue to grow and be seen as valuable by more people, then it "has to become more central" to a portfolio, Laffont said.

Nightly regrets

Coatue has invested in private and public crypto companies like data provider Dune Analytics, bitcoin miner Hut 8 and artificial intelligence play CoreWeave. The latter company has a partnership with bitcoin miner Core Scientific. The bitcoin opportunity wasn't immediately clear to Laffont, however.

"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.

Laffont described his investment philosophy as one that emphasizes the importance of simple, "obvious" ideas over "complicated" ones. While crypto market participants have deliberated over the use cases and potential of the cryptocurrency for years, Laffont said he overlooked the simplest aspect of all.

"That … as long as other people think it's valuable, it gets more valuable over time – and that's what we missed," he said. "Now I go back and I say, this is crazy – why wouldn't everyone have one or two or 3% or 4% of your assets in something like bitcoin that … protects you against inflation?"

'The dying population'

Laffont identified three cohorts of his client base: those who are hands off and leave the investing to him, those wondering "why did you miss one of the biggest trends in the world," and the risk-averse ones who feel comfortable "as long as you don't dabble in crypto."

The latter "is the dying population," Laffont said. "Every year there's a little bit less of them. That's the spectrum that you get from institutional investors. Hopefully, we see that distribution continue to change."

While Laffont has become more of a bitcoin enthusiast than he used to be, he still told summit attendees not to get carried away and to approach the cryptocurrency with basic investing principles.

"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. "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."