- BlackRock integrates Bitcoin into its $150B model portfolios with a 1%-2% allocation.
- Bitcoin’s volatility prompts BlackRock to cap exposure, balancing risk and returns.
- Institutional adoption grows as BlackRock eyes a Bitcoin ETF for European markets.
BlackRock Inc., the world’s largest asset manager, has integrated Bitcoin into its model portfolios for the first time. The company allocates 1% to 2% of its target allocation portfolios, which include alternative assets, to the iShares Bitcoin Trust ETF (IBIT). This adjustment affects BlackRock’s $150 billion model-portfolio universe. The decision arrives as financial advisers increasingly rely on pre-structured investment strategies. These portfolios guide fund flows and rebalancing for advisers and platforms.
The asset manager has taken a strategic step by adding Bitcoin to its investing framework. According to Michael Gates who is the lead portfolio manager for the Target Allocation ETF suite Bitcoin demonstrates potential as a long-term investment. The investment manager recognizes Bitcoin functions as a standalone asset that brings distinct value to portfolios that mix different types of financial products.
BlackRock controls investment funds ranging between $130 billion and $150 billion through its multi-strategy approach. The minimal Bitcoin investment indicates a significant progress toward making cryptocurrencies a standard investment choice.
Bitcoin Allocation Responds to Market Trends
Bitcoin price fluctuated during BlackRock’s strategic investment move, after reaching an all-time high of $109,350 in January 2025, but dropping to $83,000-$84,000. A 12.48% Bitcoin price decline between February 24 and 27 caused $2.4 billion in withdrawals from Bitcoin ETFs. The iShares Bitcoin Trust ETF experienced its highest withdrawal total of $420 million when investors pulled funds out on February 26th 2024. Despite this, the asset manager limits its allocation to mitigate volatility risks.
A December 2024 BlackRock Investment Institute paper supports this cautious approach. It warns that allocations above 2% heighten portfolio risk due to Bitcoin’s fluctuations. Eve Cout, head of portfolio design for US Wealth at BlackRock, emphasizes client demand for alternative assets. She explains that advisers seek guidance on sizing and scaling these positions. The firm’s conservative stance balances innovation with risk management.
Institutional Impact and Future Outlook
The asset manager’s decision could influence broader institutional interest in Bitcoin. The $35 billion in net inflows to U.S. Bitcoin ETFs in 2024 signals strong demand, despite recent setbacks. Analysts like James Seyffart from Bloomberg Intelligence view this as a pioneering move. He suggests other BlackRock models may follow, though reactions vary. Some advisers welcome the shift, while others remain wary of Bitcoin’s reputation.
The asset manager also plans a Bitcoin exchange-traded product (ETP) in Europe. This expansion aims to capture global interest in cryptocurrency investments. BlackRock adjusts its broader strategy too, trimming equity exposure from 4% to 3% and reducing long-duration bonds. These changes reflect a response to cooling earnings and market shifts.
