Key Takeaways
- BlackRock has added its Bitcoin ETF to its $150B model portfolio.
- The allocation will range between 1% and 2% of target portfolios.
- IBIT has attracted over $37 billion in inflows since its launch.
The world’s largest asset manager has added a 1% to 2% allocation of IBIT to its target allocation portfolios, according to an investment outlook viewed by Bloomberg.
While this represents a small portion of BlackRock’s overall model portfolio business, it opens the door for increased institutional demand for Bitcoin.
Michael Gates, lead portfolio manager for BlackRock’s Target Allocation ETF model portfolio suite, explained the reasoning behind the move:
We believe Bitcoin has long-term investment merit and can potentially provide unique and additive sources of diversification to portfolios.
Strong Bitcoin ETF demand despite market decline
BlackRock’s decision comes amid a broader market downturn, with Bitcoin dropping below $84,000 after reaching a record high of $110,000 in January.
Despite recent outflows of $900 million from IBIT in the past week, demand from financial advisors for Bitcoin exposure in model portfolios remains strong.
IBIT launched in January 2024 and became one of the most successful ETF debuts in history, attracting over $37 billion in inflows last year.
BlackRock’s portfolio adjustments
Alongside adding IBIT, BlackRock made other allocation adjustments, including reducing long-duration fixed-income exposure and trimming its equity overweight to 3% from 4%.
These shifts resulted in billions of dollars flowing between various BlackRock funds, including a $2.3 billion inflow into the iShares 10-20 Year Treasury Bond ETF.
