Does it make good financial sense to allocate 1-5% of assets into bitcoin(crypto)?

Without more information, the answer is "No".

It's important to understand the role of an asset in your portfolio as well as your risk appetite.

These are some reasons one might have to have crypto in the portfolio:

1. portfolio diversification - well its quite a different asset class that can look like commodity (ie btc), stocks (ie some DAO tokens on Ethereum), bonds (ie lending pool tokens on Ethereum, or some say ETH 2.0), derivatives (ie, synthetic assets of different protocol), etc

2. a moon shot - similar to how people put some money in penny stocks, or highly leveraged positions to hope that it generates huge returns

3. hedge against inflation - think digital gold

4. others

As for your risk appetite, there are different types of crypto as well as token in the decentralized finance space in Ethereum that people of different risk profiles can keep in their portfolio. You need to pick one that suits your need.

If you are allocating as much as 5% or more, I'll suggest some passive investing strategy as well. Have described some of the defi strategy in this post https://geek.sg/blog/passive-investing-strategi.... ​​​