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28 Feb

BlackRock to Increase Bitcoin ETF Allocation, Signaling Long-Term Institutional Confidence

BlackRock to Increase Bitcoin ETF Allocation, Signaling Long-Term Institutional ConfidenceAccording to PANews, BlackRock Inc., the world’s largest asset manager, is set to increase its allocation to the iShares Bitcoin Trust ETF (IBIT) by 1% to 2% within its target allocation investment portfolios that allow alternative assets. While this represents a relatively small portion of BlackRock’s overall model portfolio business, the move could pave the way for new institutional demand at a time when crypto market sentiment remains uncertain.BlackRock’s Model Portfolios: A Potential Capital Inflow Channel for BitcoinModel portfolios—pre-structured investment strategies for financial advisors—have experienced significant growth in recent years. Adjustments to these portfolios can trigger substantial capital inflows into specific assets. By integrating IBIT into these portfolios, BlackRock is potentially driving increased exposure to Bitcoin among traditional investment firms and wealth managers.BlackRock’s Perspective on Bitcoin’s Role in Portfolio DiversificationMichael Gates, chief portfolio manager for BlackRock’s target allocation ETF model portfolio series, emphasized Bitcoin’s long-term investment potential and its unique diversification benefits for institutional portfolios. Gates noted in an investment commentary on February 27 that BlackRock sees Bitcoin as an alternative asset class that could enhance portfolio resilience.A BlackRock spokesperson confirmed the planned allocation increase, reinforcing the asset manager’s commitment to Bitcoin as part of a balanced investment strategy.Bloomberg Analysts: BlackRock Has Already Integrated IBIT into Some PortfoliosBloomberg analysts reported earlier today that BlackRock has already added IBIT to one of its smaller model portfolios, suggesting that the allocation strategy is already underway. If BlackRock expands its Bitcoin ETF exposure across larger model portfolios, this could further strengthen institutional adoption and drive additional liquidity into the market.Institutional Bitcoin Adoption Continues to EvolveDespite recent market downturns, BlackRock’s decision reaffirms Bitcoin’s growing role in institutional portfolios. If more asset managers follow suit, Bitcoin ETFs could see sustained inflows, countering recent outflows and volatility in the crypto space. BlackRock’s strategic move highlights the increasing acceptance of Bitcoin as a legitimate asset class among traditional investors.
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