In a recent report, analysts at BlackRock suggested that Bitcoin should comprise 1% to 2% of traditional 60/40 investment portfolios.
This marks a shift from the previous exclusion of cryptocurrency by traditional investors.
BlackRock’s Bitcoin ETF Drives Institutional Adoption
BlackRock’s latest report offers guidance for investors willing to accept the risks of Bitcoin, outlining strategies for allocating to the cryptocurrency amid its continued growth.
Factors such as President-elect Donald Trump’s favorable stance towards crypto and his pro-crypto appointments to key government positions have fueled this year’s rally. Additionally, Bitcoin’s recent $100,000 milestone has been a psychological trigger for more institutional investors to get involved with the largest cryptocurrency.
This was reflected in the ETF market, as Bitcoin ETFs, including BlackRock's iShares Bitcoin Trust (IBIT), attracted billions in investment during this surge.
New report from BlackRock today recommending 1-2% exposure to Bitcoin ETFs, first time they’ve given a specific number. They published this because they had a lot of questions about how much, wrote ETF analyst Eric Balchunas on X (formerly Twitter)
However, despite the gains, Bitcoin’s history of volatility remains a concern. BlackRock’s document emphasizes a “risk budget” approach, urging investors to weigh the potential rewards against the inherent risks.
Bitcoin's famous price fluctuations have led to drops of up to 80% since its creation in 2009, even though it has risen 140% this year.
However, the recent decoupling of cryptocurrency from traditional asset classes such as technology stocks is significant. BlackRock attributes this divergence to factors such as rising geopolitical tensions, global financial fragmentation and erosion of trust in banks.
Decoupled Bitcoin and the Role of ETFs: BlackRock’s Growth and Leadership
The introduction of spot Bitcoin ETFs in the U.S. in January was a major catalyst for Bitcoin’s recent rise. Assets under management in these funds have surpassed $113 billion, with nearly $10 billion invested since Trump’s election victory in November.
Bitcoin ETFs Weekly Liquid Inflow. Source: SoSoValue
Furthermore, weekly inflows remain extremely positive, with over $2.7 billion in the first week of December alone. BlackRock’s IBIT leads these inflows, significantly outperforming its competitors.
Combined, the 12 U.S. Bitcoin ETFs now hold more than 1.1 million BTC, exceeding Bitcoin creator Satoshi Nakamoto’s estimated holdings. BlackRock’s IBIT also has more assets under management than all European regional ETFs combined.
The article BlackRock suggests allocating up to 2% of portfolios to Bitcoin was first seen on BeInCrypto Brasil.
