How Much of Your Portfolio Should You Allocate to Bitcoin: BlackRock Analysts Answer

The need to get involved with Bitcoin is also emphasized by other popular market players. For example, the day before, the idea of ​​investing in BTC and gold was supported by the founder of the hedge fund Bridgewater, Ray Dalio.

He expects the debt crisis to develop in different countries in the coming years, against which ordinary money will be much cheaper. Therefore, in such conditions, Bitcoin seems to be a pretty good choice for the role of a tool for protecting capital – especially since it has already coped with this task before.

How much should you invest in Bitcoin?

BlackRock analysts believe that market players should allocate no more than 2 percent of their portfolio to purchasing BTC. Such a small figure is associated with the high risks of investing in crypto and, at a minimum, the current uncertainty of regulation of the coin industry in the United States. Although such a recommendation from the world’s largest investment fund is still worth a lot.

BlackRock analysts shared their findings on risk management in the digital asset sector in a published report. Here is a quote from Decrypt .

In its short history, Bitcoin has experienced both major surges and major crashes in value. This volatility, as well as the cryptocurrency’s unique characteristics, raises the question of what role it should play in investors’ portfolios.

The authors added that a “reasonable range for Bitcoin” is 1-2 percent of the portfolio’s total capitalization. In addition, the asset is still risky, and without underlying cash flows, the only driver of its price is adoption among large investors and everyday users around the world.

Experts also noted that in the future, a larger distribution of Bitcoin may lead to a decrease in the risks associated with investing in it. However, in this case, the growth rate of BTC may also slow down, which would be quite logical.

BlackRock’s report is aimed at users looking to add Bitcoin to their multi-asset portfolios. The Wall Street giant is not necessarily advising all investors to buy the cryptocurrency.

Last year, BlackRock was one of the driving forces behind the approval of Bitcoin spot ETFs. Thanks to its efforts, the Securities and Exchange Commission (SEC) allowed cryptocurrency exchange-traded funds to be listed.

Of all the cryptocurrency ETFs, the BlackRock fund was the most successful, attracting the largest investment volume and generating the largest trading volume. BlackRock previously stated that Bitcoin is an independent asset class, and investors buy it to insure themselves against possible debt crises.

Meanwhile, the fundamental adoption of BTC is growing. According to research from the Consensys platform, in 2024, the number of cryptocurrency owners increased in several countries: by 8 percent in Mexico, by 7 percent in the Philippines and South Africa, as well as by 5 percent in Germany and 4 percent in Japan.

Overall, emerging markets are leading the way in crypto adoption, Cointelegraph reports . For example, at least half of respondents in Nigeria (84 percent), South Africa (66 percent), Vietnam (60 percent), the Philippines (54 percent), and India (50 percent) said they would have a crypto wallet by 2024.

Türkiye and the United States also rank highly, with 44 and 43 percent of respondents indicating the availability of a tool for conducting transactions with digital assets on the blockchain.

According to the study, about 40 percent of survey respondents currently own or have previously purchased cryptocurrency. However, coin ownership is significantly lower in countries such as Japan, Argentina, Canada, France, Italy, and the United Kingdom, where less than a third of respondents have ever purchased digital assets.

Unfortunately, there are regular situations in the world where criminals rob or even kidnap cryptocurrency investors. They may be tortured to force them to reveal their crypto wallet password or simply transfer coins to a specified address. Therefore, ideally, you should not disclose your participation in the blockchain industry, including through survey forms.

In terms of cryptocurrency purchase intentions, the majority of respondents in Asia and Africa want to invest in the next 12 months, while the majority of respondents in Europe, Canada, South Korea, and Japan indicate they are unlikely to invest in Bitcoin.

Respondents from Turkey, the United States and Latin American countries show moderate investment intentions, falling between these two extremes.

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