{"id":1507641,"date":"2024-12-12T23:00:00","date_gmt":"2024-12-13T04:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1507641"},"modified":"2024-12-12T23:00:00","modified_gmt":"2024-12-13T04:00:00","slug":"worlds-largest-asset-manager-suggests-up-to-2-is-reasonable-bitcoin-portfolio-allocation","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/worlds-largest-asset-manager-suggests-up-to-2-is-reasonable-bitcoin-portfolio-allocation\/1507641\/","title":{"rendered":"World’s Largest Asset Manager Suggests Up To 2% Is “Reasonable” Bitcoin Portfolio Allocation"},"content":{"rendered":"

World’s Largest Asset Manager Suggests Up To 2% Is “Reasonable” Bitcoin Portfolio Allocation<\/span><\/p>\n

\n

The world\u2019s largest asset manager, BlackRock, said a portfolio allocation of up to 2% is “reasonable” for investors who wish to hold Bitcoin, <\/strong>in their latest Investment Perspectives report.<\/a><\/p>\n

They begin the report by noting that “bitcoin cannot be compared to traditional assets,”<\/strong><\/em> but from a portfolio construction perspective, Samara Cohen (CIO of ETFs) and her team suggest that the so-called “Magnificent 7” group of mega-cap tech stocks is a useful starting point.<\/p>\n

“Those stocks represent single portfolio holdings that account for a comparatively large share of portfolio risk as with bitcoin. <\/em><\/p>\n

In a traditional portfolio with a mix of 60% stocks and 40% bonds, those seven stocks each account for, on average, about the same share of overall portfolio risk as a 1-2% allocation to bitcoin<\/strong>.<\/em><\/p>\n

We think that\u2019s a reasonable range for a bitcoin exposure.”<\/em><\/strong><\/p>\n

As with gold, bitcoin can be driven by sentiment, narratives and momentum \u2013 both up and down.<\/p>\n

<\/a><\/p>\n

Why not more, they ask (and answer):<\/p>\n

“Going beyond that would sharply increase bitcoin\u2019s share of the overall portfolio risk.”<\/em><\/p>\n

<\/a><\/p>\n

With approximately $11.5 trillion in assets under management (and manager of the largest spot BTC ETF, iShares Bitcoin Trust (IBIT), which holds net assets of nearly $54 billion), they are worth listening to.<\/p>\n

According to BlackRock, investors “need to think about Bitcoin\u2019s expected returns in a different way: it has no underlying cash flows for estimating future returns. What matters: the extent of adoption<\/strong>.”<\/p>\n

“Bitcoin may also provide a more diversified source of return,\u201d BlackRock said, adding:<\/em><\/p>\n

“We see no intrinsic reason why Bitcoin should be correlated with major risk assets over the long term given its value is driven by such distinct drivers.”<\/em><\/strong><\/p>\n

<\/a><\/p>\n

Longer term, BTC “could potentially also become less risky \u2013 but at that point it might no longer have a structural catalyst for further sizable price increases,” the report said.<\/p>\n

Instead, “investors may prefer to use it tactically to hedge against specific risks, similar to gold.”<\/strong><\/em><\/p>\n

Launched in January, spot BTC ETFs emerged as 2024\u2019s most popular investment vehicles,\u00a0breaking $100 billion in net assets<\/a>\u00a0in November.\u00a0<\/p>\n

As CoinTelegraph reports<\/em><\/a>, these surging inflows from institutional investors could cause\u00a0\u201cdemand shocks\u201d in 2025<\/a>, driving up BTC\u2019s spot price, according to a Dec. 12 report by Sygnum Bank.<\/p>\n

\u201cOur analysis shows how even relatively modest allocations from this segment can fundamentally alter the crypto asset ecosystem<\/strong>,\u201d Sygnum said.<\/em><\/p>\n

<\/a><\/p>\n

The report, dubbed ‘Sizing Bitcoin in portfolios’,<\/a> was released by BlackRock Investment Institute on Dec. 12.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nThu, 12\/12\/2024 – 18:00<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/crypto\/worlds-largest-asset-manager-suggests-2-reasonable-bitcoin-portfolio-allocation<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

World’s Largest Asset Manager Suggests Up To 2% Is “Reasonable” Bitcoin Portfolio Allocation The world\u2019s largest asset manager, BlackRock, said a portfolio allocation of up…<\/p>\n","protected":false},"author":0,"featured_media":1507642,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1507641","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1507641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1507641"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1507641\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1507642"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1507641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1507641"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1507641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}