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CoinGape 2025-02-28 17:42:27

BlackRock Adds Bitcoin ETF to Model Portfolio, Here’s All

BlackRock, the world’s largest asset manager, has incorporated Bitcoin into its $150 billion model portfolio framework. The company has added a 1% to 2% allocation of the iShares Bitcoin Trust ETF (IBIT) to its target allocation portfolios, which accommodate alternative assets. BlackRock Introduces Bitcoin ETF in Model Portfolios According to a recent Bloomberg report , BlackRock has included Bitcoin in its investment strategy by allocating a small portion of its model portfolios to IBIT. The asset manager’s model portfolios are designed to provide structured investment strategies to financial advisers. The allocation of IBIT is set between 1% and 2%, as BlackRock considers this range reasonable for balancing risk and diversification. The firm has stated that Bitcoin can offer long-term investment potential while adding diversification benefits to portfolios. BlackRock’s model portfolios influence large capital flows, as they combine various funds into ready-made investment strategies. With IBIT now included, institutional exposure to Bitcoin may increase, depending on demand from financial advisers and investors. Bitcoin ETF Inflows Show Mixed Trends Bitcoin ETF inflows have slowed in recent weeks despite IBIT’s strong launch in early 2024. Investors pulled approximately $900 million from Bitcoin ETFs over the past week. This outflow comes after a period of high demand, where IBIT saw record inflows of $37 billion last year. Consequently, according to a recent CoinGape report, the Bitcoin ETF outflows could trigger further downside pressure on BTC and the crypto market. With institutional investors reducing exposure, Bitcoin price may struggle to regain key support levels. Despite the slowdown, BlackRock maintains confidence in Bitcoin’s role within a diversified portfolio. The firm’s investment team emphasized the importance of guiding advisers on the appropriate allocation and management of Bitcoin exposure. Meanwhile, BlackRock continues to adjust its overall portfolio allocation, including a reduction in long-duration fixed-income exposure. These changes reflect the company’s broader market strategy in response to economic conditions and investor sentiment. Bitcoin Price Volatility and Market Outlook Meanwhile, Bitcoin has experienced price fluctuations recently. The cryptocurrency is currently trading around $84,000, down from nearly $110,000 last month. Market conditions, economic concerns, and global trade tensions have contributed to the decline. BlackRock’s decision to limit Bitcoin ETF exposure to a maximum of 2% aligns with its risk assessment. The firm previously stated that higher allocations would disproportionately increase portfolio risk. This cautious approach suggests that BlackRock is positioning Bitcoin as an alternative asset rather than a core holding. Additionally, with BTC price flashing bear market signals, ARK Invest offloaded $9M in spot BTC ETFs, adding to selling pressure. Institutional exits and weak demand suggest further downside risks for Bitcoin. If BTC fails to reclaim key levels, the bearish trend could deepen. The post BlackRock Adds Bitcoin ETF to Model Portfolio, Here’s All appeared first on CoinGape .

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