BlackRock: Bitcoin should account for 1% to 2% of a traditional "60/40" portfolio

2024-12-12 21:31:12

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ChainCatcher news, BlackRock's investment research has pointed out in a new report titled "The Role of Bitcoin in Portfolios" that this cryptocurrency, long avoided by mainstream investors, should now account for 1% to 2% of a traditional "60/40" portfolio.

The report also noted that Bitcoin has historically had a low correlation with traditional markets. Samara Cohen, Chief Investment Officer of ETFs and Index Products, stated, "In a 60/40 portfolio, a 1-2% allocation would create a risk profile similar to that of the Magnificent 7 stocks. However, Bitcoin's excessive volatility has led to a 70% drop within a year, making it unwise to increase its weight. A 1% weight would bring a 2% risk, while a 2% allocation would increase the risk weight to 5%. The report indicated that if the weight were to double to 4%, the overall risk would multiply to 14%."

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