BlackRock on Bitcoin: 2% allocation reasonable for portfolios

BlackRock has recommended a Bitcoin allocation size for the first time, likening the digital asset to Wall Street’s “Magnificent 7.”

According to a new BlackRock report, allocating 1-2% of a multi-asset portfolio to Bitcoin (BTC) represents a “reasonable range,” as spot BTC exchange-traded funds have amassed $113 billion in assets under management.

The $11.5 trillion asset manager envisions an ideal portfolio split 60-40 between stocks and bonds. BlackRock suggests padding the stock segment with Alphabet (Google), Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla—referred to as the Magnificent 7—while maintaining the same risk weight as a 2% BTC allocation.

“Why not more? Going beyond that would sharply increase Bitcoin’s share of the overall portfolio risk,” per the world’s largest wealth manager and spot BTC ETF issuer.

This marks the first time BlackRock has explicitly specified how much investors should allocate to BTC. Bloomberg’s Eric Balchunas noted that the report likely addresses frequent “how much?” inquiries. As of December 12, BlackRock’s IBIT dominated the spot BTC ETF market, managing $53.8 billion in investments.

Spot Bitcoin funds now hold over 1.104 million BTC, surpassing Satoshi Nakamoto’s balance. BlackRock’s ETF accounts for roughly half of this investor stockpile, with approximately 529,000 tokens held under Coinbase Custody.

Crypto sentiment posited that Bitcoin and spot BTC ETF demand would skyrocket under the incoming pro-crypto Donald Trump administration. 

Banks like Goldman Sachs, which already own nearly $1 billion in BTC ETF shares, signalled willingness to increase participation based on regulatory changes. States such as Alabama and Pennsylvania considered passing laws to set up strategic BTC reserves, while governments in the U.S., Brazil, and Canada mulled the same legislation.