Industry reports or surveys from financial publications

BlackRock Recommends Up to 2% Bitcoin Allocation, Citing ETF Success and Price Surge

Dec 12, 2024, 01:35 PM

BlackRock Inc., the world's largest asset manager with $11.5 trillion in assets under management, has recommended that investors consider allocating up to 2% of their portfolios to Bitcoin. This recommendation comes from a new research report titled 'Sizing Bitcoin In Portfolios' by BlackRock Investment Institute, led by Chief Investment Officer for ETF and Index Investments Samara Cohen, which compares Bitcoin's risk profile to that of the 'Magnificent 7' companies like Google, Amazon, Meta, and Apple. The report suggests that Bitcoin, despite its volatility, offers unique benefits as a portfolio diversifier due to its historically low correlation with traditional markets. BlackRock's analysis indicates that a 1% to 2% allocation in a traditional 60/40 investment portfolio would yield a risk profile similar to holding one of the Mag 7 stocks. The firm also notes that future returns for Bitcoin might be more challenging as it becomes a tactical asset similar to gold. BlackRock operates the world's largest Bitcoin ETF, the iShares Bitcoin Trust (IBIT), with $50.8 billion in assets under management. In the last 12 months, Bitcoin's price has gained more than 130% compared to a gain of 32% for the S&P 500.