BlackRock’s iShares Bitcoin Trust ETF has been a roaring success, smashing records and now managing $53.8 billion in assets.
But the world’s biggest asset manager still has a conservative view of the cryptocurrency—and recommends that investors who want to invest in Bitcoin should only put a maximum of 2% of the orange coin in their portfolio.
In a Thursday report, the Wall Street titan said that putting Bitcoin in a portfolio was like investing in top tech stocks: potentially beneficial, but also risky.
“Over its short history, Bitcoin has seen both major surges and selloffs,” the report notes. “This volatility, plus Bitcoin’s unique characteristics, raises the question of what role it should play in portfolios.”
It added that “a reasonable range for Bitcoin exposure” was 1-2% of a portfolio’s total value. It added that the asset was still risky, and with no underlying cash flows, adoption was the only thing driving its price.
BlackRock’s Bitcoin ETF Is Now Bigger Than Its Gold Fund
BlackRock, the world’s largest asset manager, now handles more Bitcoin than gold for its flagship iShares exchange-traded funds (ETFs). To put it more precisely: The Wall Street giant’s iShares Bitcoin Trust ETF (IBIT) has now surpassed its iShares Gold ETF (IAU) in terms of net assets—a remarkable feat given the fact that the former product has only existed since January. The iShares Gold ETF has been offered since 2005; BlackRock acquired the business and brand from Barclays in 2009. As of m...
The report—authored by Samara Cohen, Paul Henderson, Robert Mitchnick, and Vivek Paul—noted that more adoption in the future could lead Bitcoin to be less risky. But if this were to happen, it could “no longer have a structural catalyst for further sizable price increases.”
BlackRock's report is targeted towards users who wish to include Bitcoin in their multi-asset portfolios; the Wall Street giant isn't necessarily advising all investors to buy the cryptocurrency.
BlackRock sent shockwaves through the markets last year when it filed to launch a Bitcoin exchange-traded fund with the Securities and Exchange Commission.
Less than 1% of Microsoft Shareholders Voted in Favor of Investing in Bitcoin
New information has come to light showing that Microsoft shareholders strongly opposed a proposal on Tuesday to invest in Bitcoin, even though the asset was described as an effective inflationary hedge. Merely 0.55% of shareholders supported a proposal for buying and holding Bitcoin. The leading crypto by market capitalization surpassed $100,000 per coin once again on Wednesday. According to the annual Microsoft Investor Relations report, 28.234 million Microsoft shareholder votes were cast in...
Then, in January, Wall Street’s top regulator approved the BlackRock iShares Bitcoin Trust—along with 10 other ETFs—and it started trading.
Of all the crypto ETFs, BlackRock’s has been the most successful, attracting the most investment and trading volume.
BlackRock has previously said that Bitcoin is in an asset class of its own, and that investors are buying it to hedge against any potential debt crises.
Edited by Andrew Hayward
Editor's note: This story was updated after publication to include clarification about BlackRock's recommendation.
