IBIT Bitcoin ETF Joins BlackRock’s Alternative Asset Model Portfolio

BlackRock Allocates Bitcoin ETF to Alternative Asset Model Portfolio

Investment powerhouse BlackRock has taken a step toward mainstream crypto adoption by integrating its iShares Bitcoin Trust (IBIT) into one of its model portfolios. This move underscores bitcoin’s growing appeal among institutional investors as a legitimate asset class.

BlackRock’s model portfolios are used as strategic guides by financial advisors and investment platforms, helping them allocate assets based on long-term goals and market conditions. While these models aren’t mandates, they influence billions in capital allocation.

According to Bloomberg Intelligence ETF analyst James Seyffart, BlackRock has assigned a 1% to 2% allocation to IBIT within its target allocation portfolio that includes alternative assets.

In a report published Thursday, Michael Gates, lead portfolio manager for BlackRock’s Target Allocation ETF models, pointed to several key reasons for bitcoin’s inclusion. He highlighted BTC’s role as a potential hedge against economic and geopolitical uncertainty, a store of value, and a key asset in the shift toward digital finance.

“Bitcoin offers diversification benefits and unique sources of return that can complement traditional multi-asset portfolios,” Gates noted.

While IBIT’s inclusion is in one of BlackRock’s smaller model portfolios, it’s a landmark decision for the firm, which has historically taken a cautious approach to crypto.

“This is the first time BlackRock has included bitcoin in any of its models,” said Seyffart. “It likely won’t be the last, but given bitcoin’s divisive reputation, it’s uncertain when or if IBIT will make its way into BlackRock’s larger, flagship portfolios.”

BlackRock’s model portfolios currently manage around $150 billion in assets as of December 31, 2024.