The world's largest asset manager has increased the share of its target portfolios by 1-2%.
Updated March 1, 2025, 20:05 UTC Published February 28, 2025, 17:13 UTC
What you need to know:
- BlackRock has increased its allocation to iShares Bitcoin Trust (IBIT) in its model portfolio by 1-2%, opening up opportunities for investing in alternative assets.
- This is the first time BlackRock has integrated IBIT into its models, which could indicate broader institutional adoption of Bitcoin.
- BlackRock's model portfolios manage approximately $130 billion, and while that amount is smaller, it could have an impact on the advisers and platforms that follow those models.
BlackRock has added iShares Bitcoin Trust (IBIT), a fund created by the asset manager that holds bitcoin (BTC), to one of its model portfolios.
These models offer portfolios and rebalancing procedures, which are then followed by advisors and platforms, who can also request model changes depending on their investment needs.
BlackRock has added 1% to 2% of IBIT to its target allocation portfolio, allowing for exposure to alternative assets, noted James Seyffarth, an ETF analyst at Bloomberg Intelligence.
In a report published Thursday, Michael Gates, lead portfolio manager for BlackRock's Target Allocation ETF models, said there are “several significant arguments supporting the long-term investment case for bitcoin.”
According to Gates, this includes the crypto asset as a new store of value and global monetary alternative, as well as a way to hedge against US dollar dominance and political instability, and as an indirect way to participate in the digital transition of goods and services from “offline” to “online.”
“Taken together, these characteristics can provide unique and additional sources of risk premiums and diversification to traditional multi-asset portfolios,” Gates added.
The model represents one of IBIT's smaller portfolios, but the move is key as it marks the first time BlackRock has decided to add IBIT to its model.
“This is a big deal because it’s the first model that includes Bitcoin,” Seyfarth said. “It probably won’t be the last, but Bitcoin is also polarizing — some people hate it and some people love it — so I’m not sure if they’ll add IBIT to their core models, which are followed by much larger amounts of money.”
As of December 31, 2024, BlackRock's model portfolios manage approximately $150 billion in assets.
CORRECTION (28 February 2025, 14:56 UTC): Added that BlackRock's model portfolios manage $150 billion in assets, not $130 billion as erroneously stated in a previous version of the article.
