Asset management behemoth BlackRock has recommended gaining 1-2% exposure to Bitcoin in its recent paper.
Such an allocation would be able to provide investors with a "diverse source of risk," according to BlackRock’s Samara Cohen.
Earlier this week, billionaire Thomas Peterffy also recommended up to 3% of one's portfolio into Bitcoin. However, he also warned that it would be too dangerous to invest more than a tenth of one's assets in the volatile cryptocurrency.
According to Eric Balchunas, the leading ETF analyst, it is the first time that BlackRock has recommended a specific portfolio weighting for Bitcoin.
The largest cryptocurrency has soared by roughly 141.96% on a year-to-date basis, recently surpassing the $100,000 level for the first time. Hence, it might naturally start attracting more investor attention.
Bitcoin is currently changing hands at $101,459 after reaching an intraday peak of $102,528 earlier this Thursday. It is now just 1.9% away from surpassing its current record high of $103,679.
Smaller risks and smaller returns
In its paper, BlackRock has also predicted that Bitcoin could end up becoming less risky it achieves broader institutional adoption. However, this also means that its returns will become less eye-catching.
As reported by U.Today, Bitcoin is currently substantially underperforming the previous bullish cycle. According to Glassnode, its volatility has been dampened due to wider institutional adoption.
BlackRock, of course, played a key role in broader Bitcoin adoption with its extremely successful Bitcoin ETF. According to the most recent data provided by analytics platform SoSoValue, IBIT is now approaching $54 billion in total assets.
Godfrey Benjamin
Dan Burgin
Vladislav Sopov