BlackRock Recommends Bitcoin Allocation of Up to 2% in Portfolios

The asset manager highlights Bitcoin's diversification benefits but warns of its volatility and potential risks.

BlackRock advises investors to allocate 1-2% of their portfolios to Bitcoin, citing its potential as a diversifier with low correlation to traditional assets.
The recommendation is based on maintaining a risk profile comparable to holding mega-cap tech stocks like the 'Magnificent Seven' within a 60/40 portfolio structure.
Bitcoin's volatility and historical sharp selloffs are emphasized as key risks, with BlackRock cautioning against allocations exceeding 2%, which could disproportionately increase portfolio risk.
Broader adoption of Bitcoin, facilitated by products like BlackRock's iShares Bitcoin Trust ETF, could reduce its volatility but may also limit its potential for significant price gains.
BlackRock's iShares Bitcoin Trust has been a standout success among recently launched Bitcoin ETFs, managing over $50 billion in assets and contributing to the cryptocurrency's record-breaking price surge past $100,000.