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BlackRock compares Bitcoin to the ‘magnificent seven’ and suggests investing in the cryptocurrency
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The asset manager BlackRock went further in its defense of Bitcoin (BTC). In a report published this Thursday (12), the manager stated that the BTC carries a risk profile similar to that of the “magnificent seven” stocks. This title refers to the shares of Apple, Microsoft, Amazon and other companies that are among the most valued in the S&P 500.
Furthermore, the manager’s report, published in Forbes magazine, also recommended that investors allocate up to 2% of their portfolio in BTC. According to ETF analyst Eric Balchunas, this is the first time that the manager has indicated a fixed allocation percentage for BTC.
In October, the manager even predicted a strong appreciation for Bitcoin and said that large investments have not yet arrived. The company’s CEO, Larry Fink, has also praised the cryptocurrency in the past, but both had not suggested allocation percentages so far.
Written by BlackRock analysts, the report stated that Bitcoin offers a similar risk profile to that of seven magnificent companies (Apple, Amazon, Tesla, Nvidia, Meta, Google and Microsoft). In other words, analysts reinforced BTC’s correlation with companies in the US technology sector.
1% to 2% allocation in Bitcoin
In this sense, the document recommends that investors allocate between 1% to 2% of their portfolio in Bitcoin. While highlighting the relationship between BTC and traditional equities, BlackRock suggested there could be a divergence soon.
BlackRock said this will happen due to factors such as global fragmentation of the financial systemgrowing geopolitical tensions, lack of confidence in the financial system and growing deficits.
Despite the strong case for BTC, companies like Microsoft are still uncertain about its potential. As Todaysgist reported, Microsoft shareholders rejected the proposal to include Bitcoin in the company’s cash flow. According to the decision, the board used BTC volatility as justification
Meanwhile, the manager hinted that Bitcoin price may have a harder time posting the kind of gains it has become accustomed to over time. This is due to the fact that the more BTC appreciates, the more difficult it becomes to achieve exponential returns.
In a post on X, Bloomberg analyst James Seyffart explained why BlackRock may have made this recommendation.
Seyffart said the manager is likely receiving a lot of questions from clients about how to size an allocation for the IBIT, the company’s Bitcoin ETF. The response was directed to Balchunas, who questioned the reasons for BlackRock’s recommendation.
BlackRock compares Bitcoin to the ‘magnificent seven’ and suggests investing in the cryptocurrency
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BlackRock compares Bitcoin to the ‘magnificent seven’ and suggests investing in the cryptocurrency
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BlackRock compares Bitcoin to the ‘magnificent seven’ and suggests investing in the cryptocurrency
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BlackRock compares Bitcoin to the ‘magnificent seven’ and suggests investing in the cryptocurrency
