BlackRock, the world’s largest asset manager, has announced the inclusion of the iShares Bitcoin Trust (IBIT) in its model portfolio selections. This strategic move, confirmed on Friday, marks another significant step in integrating cryptocurrency into mainstream investing.
The firm is allocating 1% to 2% of IBIT in its Target Allocation with Alternatives and Target Allocation with Alternatives Tax-Aware portfolios. These investment models cater to investors willing to embrace higher risks for potential growth.
“The Target Allocation with Alternatives models invest across a complete risk spectrum, combining a core allocation of stocks and bonds with liquid alternative investments,” a BlackRock representative stated. “The introduction of IBIT into these portfolios serves as a diversifier, aligning with the investment goals of this model, which targets investors with a higher risk appetite and growth objectives.”
While this adjustment affects only a small segment of BlackRock’s portfolio offerings, it underscores the increasing acceptance of crypto assets in traditional finance.
Growing Institutional Interest in Bitcoin
Over the years, financial advisors have shown a growing preference for model portfolios, which offer preset investment strategies. This move by BlackRock could further boost demand for IBIT, reinforcing Bitcoin’s role in diversified investment strategies.
“This is another move toward integrating Bitcoin into mainstream investing,” said ETF.com analyst Sumit Roy. “IBIT has already been a tremendous success—this addition could further amplify demand for the fund.”
Launched in January 2024 alongside other Bitcoin ETFs, IBIT quickly amassed $60 billion in assets under management, becoming the fastest-growing ETF in history. However, recent market turbulence has led to over $1 billion in outflows due to rising inflation and macroeconomic uncertainties. Despite this, IBIT still holds nearly three times the assets of its closest competitors.
Bitcoin’s Market Performance and Future Outlook
Currently, spot Bitcoin ETFs collectively manage around $90 billion, even after experiencing a $2.4 billion decline over the past week.
Bitcoin recently traded above $84,000, recovering 8% from an overnight low below $79,000. However, it remains far from its all-time high of $108,000, recorded in mid-January. Over the past month, Bitcoin’s value has fallen by 13%.
Despite this market volatility, BlackRock’s decision signals confidence in Bitcoin’s long-term viability. Roy from ETF.com, however, noted that the immediate demand impact of the model portfolio allocation remains uncertain.
“The additional inflows for IBIT may be in the millions rather than billions,” he stated.
While the short-term effect on inflows might be limited, this move carries significant symbolic weight, further solidifying Bitcoin’s position in institutional investment strategies.
