"Put 2% of Assets In"… World's Largest Financial Firm Urges Bitcoin Investment

Leap to Investment Asset, Not Speculation
"Bitcoin is Digital Gold"

BlackRock, the world's largest asset management firm, has directly recommended investing in Bitcoin. However, the allocation is limited to a maximum of 2%.

In a recent report released by four senior executives of the company, including Samara Cohen, BlackRock's Chief Investment Officer for ETFs, investors interested in Bitcoin were advised to consider allocating up to 2% of their portfolio to it. The 2% figure was derived from observing how much total risk decreases when Bitcoin is added to a portfolio.

Bitcoin prices are displayed on the Upbit customer center electronic billboard in Gangnam-gu, Seoul. Photo by Kang Jin-hyung

The report stated, "Institutional investors are also adopting Bitcoin, and regularly reviewing its correlation with stocks and volatility makes it worth adding to portfolios," but also warned, "Bitcoin is highly volatile and vulnerable to large sell-offs, so some caution is necessary."

While Bitcoin is considered a distinct asset, the report noted that in some ways it is similar to the so-called ‘Magnificent 7’ companies such as Nvidia and Microsoft. Bitcoin's market capitalization is approximately $2 trillion, which is comparable to the average market cap of these seven companies ($2.5 trillion). BlackRock explained, "Having significant exposure to the Magnificent 7 can be similar to owning Bitcoin in terms of overall portfolio risk." However, it warned that exceeding the recommended maximum allocation of 2% would cause Bitcoin's share of total portfolio risk to surpass the average of the Magnificent 7.

BlackRock advised investors to regularly review institutional Bitcoin investment decision speeds, correlations with stocks, and volatility.

Bitcoin, which has soared since the election victory of pro-cryptocurrency President Donald Trump, recently surpassed $100,000 for the first time ever. The U.S. financial media Business Insider quoted analyst Gautam Chaddha as saying, "Bitcoin will emerge as the best store-of-value asset." It also reported that Bitcoin is expected to reach $200,000 by the end of 2025 and become the new standard for institutional and corporate financial assets.

Jerome Powell, Chair of the U.S. Federal Reserve, also stated on the 4th, "Bitcoin is the digital version of gold and a competing asset to gold." Speaking at the DealBook Summit hosted by The New York Times, he said, "Bitcoin is not used as a means of payment and is highly volatile. I think Bitcoin is a competitor to gold, not the dollar."

This content was produced with the assistance of AI translation services.