Blackrock, the world’s largest asset manager, has allegedly recommended a bold 28% allocation to Bitcoin in investors’ portfolios.
Blackrock, the world’s largest asset manager, has allegedly recommended a bold 28% allocation to Bitcoin in investors’ portfolios.
This figure emerged from a recent private client event hosted by Blackrock, which focused on promoting its Bitcoin ETF, IBIT, according to information shared by investor Fred Krueger on social media platform X.
Unexpected Interest Sparks Bold Strategy
During the private event, BlackRock executives expressed surprise at the huge interest in Bitcoin coming from sectors they had not anticipated.
This interest from a diverse group of institutional investors and businesses signals a potential shift in the traditional financial sector’s approach to cryptocurrencies.
A presentation by a quantitative analyst at the event outlined how the valuation and modeling of Bitcoin within a portfolio could be streamlined, especially for more conservative institutional investors.
Since then, the suggestion that a 28% allocation to Bitcoin could be considered sensible has become a talking point among industry experts.
Skepticism faces 28% allocation proposal
Despite the excitement generated by the event, some industry experts question the viability of such a high allocation to Bitcoin.
Critics such as Eric Balchunas have expressed concern about the legitimacy of the claims, noting that even after considering Blackrock’s commitment to its Bitcoin ETF, the suggested percentage seems unreasonably high.
In response, Steven Lubka, CEO of Swan, clarified that the recommendation was not an active strategy in Blackrock funds but rather a theoretical suggestion from a quant, considered “not unreasonable.”
Lubka also referenced a peer-reviewed paper published by Blackrock, which argued for mathematical optimization of high Bitcoin allocation. This might lend some credence to the surprising figure.
