BlackRock Adds Bitcoin ETF to $150B Model Portfolios, Signaling Institutional Shift

In a major step for institutional crypto adoption, BlackRock Inc., the world’s largest asset manager, has introduced Bitcoin exposure into its $150 billion model portfolios for the first time.

The firm will allocate 1% to 2% to the iShares Bitcoin Trust ETF (IBIT), reflecting a cautious but evolving approach to digital assets.

Why BlackRock Is Betting on Bitcoin

BlackRock’s decision aligns with its strategy of blending traditional investments with alternative assets. Michael Gates, lead portfolio manager for BlackRock’s Target Allocation ETF model portfolio, stated:

“We believe Bitcoin has long-term investment merit and can provide unique diversification to portfolios.”

The move comes amid market volatility, with Bitcoin fluctuating between $73,000 and $83,000 in recent weeks. BlackRock’s research warns that allocations beyond 2% could increase crypto-related risks.

Bitcoin ETFs Face Record Outflows Amid Market Dip

Despite BlackRock’s new allocation, Bitcoin ETFs have seen record withdrawals, with:
✅ $420 million exiting BlackRock’s IBIT in a single day (Feb. 26)
✅ Total Bitcoin ETF outflows reaching $3 billion over a week
✅ Bitcoin experiencing a 12.48% price drop between Feb. 24-27

However, analysts believe this could be a temporary correction rather than a lasting trend.

BlackRock’s Long-Term Crypto Strategy

While short-term ETF outflows continue, BlackRock remains bullish on Bitcoin, with plans to:
🔹 Launch a Bitcoin exchange-traded product (ETP) in Europe
🔹 Expand crypto offerings to meet growing institutional demand

With over $35 billion in net inflows into U.S. Bitcoin ETFs in 2024, institutional interest remains strong, despite recent corrections.

BlackRock’s cautious 1% to 2% Bitcoin allocation could influence other institutions, paving the way for broader crypto adoption in traditional finance.