BlackRock sets reasonable range for Bitcoin investors, while Bitwise sees 3%

Financial titan BlackRock gave investors on Thursday its first recommendation of how much Bitcoin they should have in their holdings.

BlackRock’s call for a reasonable allocation: between 1% and 2%.

That amount would expose investors to a similar risk profile as that of the Magnificent Seven, per Eric Balchunas, senior ETF analyst at Bloomberg, who posted snippets of the BlackRock investor’s note on X.

The Big Tech stocks in the Magnificent Seven are Amazon, Apple, Microsoft, Alphabet (Google), Tesla, Meta (Facebook), and Nvidia.

However, anything above that range would “sharply increase” Bitcoin’s share of portfolio risk, said BlackRock, citing the asset’s well-known volatility. Double-digit drawdowns are common for Bitcoin, even in bull markets.

Although 1% to 2% might sound small, when the recommendation comes from the largest asset manager in the world, it carries a lot of weight. Even if only a fraction of investors heed the advice, billions are likely to flow into Bitcoin, whether through exchange-traded funds or the asset directly.

The company’s CEO, Larry Fink, has vowed that he wants to tokenise the world, with Bitcoin just the beginning. The firm also offers Ethereum ETFs.

BlackRock’s encouragement stems from the astonishing popularity of Bitcoin ETFs, which have been available to investors since January 11. The firm now holds a whopping $52 billion worth of Bitcoin, or nearly half of the sector’s market share. Grayscale places a distant second with 19%, according to Dune Analytics.

BlackRock isn’t alone in upping its Bitcoin allocation.

Ryan Rasmussen, head of research at Bitwise, another top Bitcoin ETF provider with $4.1 billion in assets under management, echoed the bullish sentiment.

“Bitcoin ETFs will attract more flows in 2025 than they did in 2024,” Rasmussen said Wednesday in Bitwise’s December investment report. That’s happening because investors are laddering up, he said.

“3% is the new 1%” Rasmussen said.

Crypto market movers

• Bitcoin is down 1% in the past 24 hours to $99,985.
• Ethereum is up 1.8% in the past 24 hours to $3,890.

What we’re reading

• Crypto ‘debanking’ is a raging issue in Washington — is the practice real? – DL News
• Microsoft fades BTC – Milk Road
• Ethereum will catapult ‘beyond $5,000,’ says analyst. Here’s when the surge will happen – DL News
• The race to adopt BTC (US vs Russia) – Milk Road
• Warren Will Have Significant Say in Selecting the Democratic SEC Commissioner – Unchained

Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.