BlackRock Suggests a 85% BTC Allocation

2 min readFeb 28, 2024

The suggestion by BlackRock, the world’s largest asset manager, of a 28% allocation to Bitcoin in investors’ portfolios has sparked significant interest and debate within the financial industry. Allegedly emerging from a private client event focused on promoting BlackRock’s Bitcoin ETF, IBIT, this recommendation has garnered attention from investors and industry insiders alike.

The reported surprise expressed by BlackRock executives regarding the strong interest in Bitcoin from unexpected quarters underscores a potential shift in the traditional financial sector’s attitude towards cryptocurrencies. The presentation by a quantitative analyst at the event outlining the rationalization of valuing and modeling Bitcoin within a portfolio, particularly for conservative institutional investors, adds weight to the recommendation.

However, despite the enthusiasm generated by the event, some industry experts, such as Eric Balchunas, have raised doubts about the feasibility of such a high allocation to Bitcoin. Balchunas questions the legitimacy of the claims, suggesting that even considering BlackRock’s commitment to their Bitcoin ETF, a 28% allocation appears excessively high.

In response to these concerns, Steven Lubka, managing director at Swan, clarified that the recommendation was not an active strategy in BlackRock’s funds but rather a theoretical suggestion by a quant, deemed “not unreasonable.” Lubka also referenced a peer-reviewed paper published by BlackRock, arguing for the mathematical optimality of a high Bitcoin allocation, potentially lending some credibility to the surprising figure.

Overall, while BlackRock’s purported recommendation of a 28% allocation to Bitcoin has stirred debate and intrigue, it remains a topic of contention within the financial industry, with experts questioning its practicality and legitimacy.