BlackRock Introduces IBIT Bitcoin ETF to Alternative Asset Portfolio
BlackRock has made a significant addition to its model portfolios by integrating a 1% to 2% allocation of the iShares Bitcoin Trust (IBIT), marking the first instance of its inclusion in any of their models.
What to know:
- BlackRock has added a 1% to 2% allocation of the iShares Bitcoin Trust (IBIT) to its model portfolio that allows for alternative assets.
- This marks the first time BlackRock has included IBIT in any of its models, potentially signaling broader institutional acceptance of bitcoin.
- BlackRock’s model portfolios manage around $150 billion, and while this allocation is relatively small, it could influence advisors and platforms that follow these models.
BlackRock has included the iShares Bitcoin Trust (IBIT)—a fund that directly holds bitcoin (BTC)—in one of its model portfolios. These models represent suggested portfolios followed by advisors and investment platforms, enabling them to tweak based on their investment targets.
James Seyffart, ETF analyst at Bloomberg Intelligence, provided insights into this addition, highlighting its significance in the current cryptocurrency landscape and its potential impact on the market.
According to Michael Gates, the lead portfolio manager for BlackRock’s Target Allocation ETF models, several substantial arguments back up the long-term viability of bitcoin as an investment. This involves its emerging role as a store of value, its potential to act as a global monetary alternative, and its function as a hedge against U.S. dollar dominance and political instability.
“Collectively, these features may help provide unique and additive sources of risk premia and diversification to traditional multi-asset portfolios,” Gates stated.
This inclusion of IBIT in BlackRock’s model portfolios represents a noteworthy move, leading to heightened visibility and interest in bitcoin among institutional investors.
Correction (February 28, 2025, 14:56 UTC): The earlier article misrepresented that BlackRock’s model portfolios manage $130 billion; the correct figure is $150 billion.
