Blackrock, the world's largest asset manager, has allegedly recommended a bold 28% allocation to Bitcoin in investors' portfolios.
This figure emerged from a recent private client event hosted by Blackrock, which was focused on promoting their Bitcoin ETF, IBIT, according to information shared by investor Fred Krueger on the X social media platform.
Unexpected Interest spurts a bold strategy
During the private event, BlackRock executives expressed surprise at the strong interest in Bitcoin coming from quarters they had not anticipated.
This interest from a diverse group of institutional investors and firms signals a potential change in the traditional financial sector's approach to cryptocurrency.
A presentation by a quantitative analyst at the event outlined how valuing and modeling Bitcoin within a portfolio could be rationalized, especially for the more conservative institutional investors.
The suggestion that a 28% allocation to Bitcoin could be considered sensible has since become a talking point among industry insiders.
Skepticism meets the 28% allocation proposal
Despite the enthusiasm generated by the event, some industry experts are questioning the feasibility of such a high allocation to Bitcoin.
Critics like Eric Balchunas have voiced concerns over the legitimacy of the claims, pointing out that even after considering Blackrock's commitment to their Bitcoin ETF, the suggested percentage seems excessively high.
In response, Steven Lubka, managing director at Swan, provided clarification that the recommendation was not an active strategy in Blackrock's funds but rather a theoretical suggestion by a quant, deemed "not unreasonable."
Lubka also referenced a peer-reviewed paper published by Blackrock, which argued for the mathematical optimality of a high Bitcoin allocation. This might lend some credence to the surprising figure.
Tomiwabold Olajide
Denys Serhiichuk
Godfrey Benjamin
