BlackRock’s Bold Call: 85% Allocation in Bitcoin for Investors
Major financial institutions and funds have long been critical of Bitcoin (BTC). However, the recent situation has seen a shift in their stance.
These financial entities are not only supporting Bitcoin but are also recommending its inclusion in investment portfolios. This newfound support from influential financial entities could have significant implications for Bitcoin’s future adoption.
Recently, global fund manager BlackRock made headlines when a cryptocurrency analyst and trader, Michael van de Poppe, shared a screenshot of a BlackRock document on social media.
The document, titled “Asset Allocation with Crypto: Application of Preferences for Positive Skewness,” revealed that BlackRock recommends an impressive 84.9% allocation of BTC in a risky portfolio. The study, conducted in April 2022, analyzed Bitcoin’s performance as an asset from July 2010 to December 2021 on a monthly basis.
According to BlackRock’s findings, for a 60-40 portfolio (60% equities and 40% bonds), the optimal allocation of BTC is 84.9%, leaving the remaining 15.1% to be divided between equities and bonds in a 60-40 ratio. Although the study was written last year, it has recently gained significant popularity on Twitter.
This recommendation from BlackRock highlights the growing recognition of Bitcoin as a potentially valuable component of a diversified investment portfolio.
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The study’s significance extends to its potential implications for BlackRock’s promotion of Bitcoin once the spot ETF receives approval from the SEC. This could parallel the first gold ETF story, where the introduction of the first gold ETF in 2004 led to a fivefold increase in the gold price, partly due to BlackRock’s global financial advisors strongly advocating for a 5% gold allocation in every portfolio.
Given this historical precedent, BlackRock’s support and promotion of Bitcoin through ETFs could play a crucial role in driving further adoption and potentially impacting Bitcoin’s market dynamics in the future.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
