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BlackRock Recommends Bitcoin Allocation With Addition to Its Model Portfolio
BlackRock Recommends Bitcoin Allocation With Addition to Its Model Portfolio
March 1, 2025
BlackRock and Bitcoin
BlackRock, the world’s largest asset manager by assets under management, recently recommended Bitcoin allocation by including the asset in its model portfolios.
The prominent asset manager has been enthusiastic about Bitcoin and its unique qualities. Now, it has taken another step in promoting the pioneering cryptocurrency by adding it to its model portfolio offerings.
BlackRock confirmed on Friday that it has added the iShares Bitcoin Trust (IBIT)—the fastest-growing fund in ETF history, providing alternative exposure to Bitcoin—to the Target Allocation with Alternatives models.
BlackRock Adds Bitcoin to Institution-Tailored Portfolio Model
For perspective, a model portfolio is a collection of predefined asset allocations tailored to meet clients’ risks and reward objectives. Asset managers modify these portfolios over time according to changing market conditions and clients’ dispositions.
On Thursday, BlackRock added IBIT to the Target Allocation with Alternatives and Target Allocation with Alternatives Tax-Aware portfolios. The asset manager confirmed adding 1% to 2% of the Bitcoin-focused product to the model portfolios.
Michael Gates, the lead portfolio manager for the BlackRock alternative model portfolio, noted that several theses confirm intrinsic value and long-term investment merits. Some include the asset’s scarcity and its track record as a hedge against inflation.
BlackRock’s IBIT Addition to Model Portfolios
As a result, the addition could provide clients with a higher risk appetite and portfolio growth target exposure to Bitcoin. Notably, this is the first time BlackRock has added IBIT to any of its model portfolios, a shift anticipated to spur demand for the ETF.
The Addition Is a Big Deal
Meanwhile, the addition followed BlackRock’s allocation adjustments of its funds on Thursday. The asset manager made several changes to its model portfolios, incorporating IBIT for the first time.
Analysis suggests that although the models to which BlackRock added IBIT were among its lower-end funds in AUM, it is significant for Bitcoin. Brian Rose, the host of London Real, stated that the development appears more significant than it seems.
He noted that BlackRock’s model portfolios guide “billions” of funds as large investors replicate them for allocation. Furthermore, he suggested that it could encourage other asset managers to pursue a similar strategy, thereby increasing inflows into Bitcoin.
Recall that BlackRock’s head of digital asset research, Robert Mitchnick, stated that the asset manager would focus on attracting institutions and wealth managers to adopt Bitcoin. The addition reflects one approach BlackRock intends to use to generate demand for the IBIT.
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