In a report titled “Sizing bitcoin in portfolios,” written by BlackRock’s Samara Cohen, Paul Henderson, Robert Mitchnick, and Vivek Paul, BlackRock takes the position that, while Bitcoin is volatile, a “resaonable range” for investors seeking a multi-asset portfolio is 1 to 2% of their portfolios.
So how can investors think about a bitcoin allocation? Bitcoin cannot be compared to traditional assets. But from a portfolio construction perspective, the “magnificent 7” group of mostly mega cap tech stocks is a useful starting point. Those stocks represent single portfolio holdings that account for a comparatively large share of portfolio risk
as with bitcoin. 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. We think that’s a reasonable range for a bitcoin exposure. Why not more? Going beyond that would sharply increase bitcoin’s share of the overall portfolio risk.
BlackRock offers an ETF in Bitcoin. And BlackRock itself is one of the largest owners of Bitcoin and keeps on buying Bitcoin:
