BlackRock has announced the inclusion of its iShares Bitcoin Trust (IBIT) in its model portfolio offerings, specifically in the Target Allocation with Alternatives and Tax-Aware portfolios. These portfolios cater to investors with a higher risk tolerance, allowing for a 1% to 2% allocation to IBIT.
A BlackRock spokesperson emphasized that this addition is in line with the investment objectives of these models, aiming to enhance diversification while adhering to the overall investment strategy of including both stocks and bonds as well as liquid alternatives.
The move is significant as it signals a continued shift in traditional finance towards embracing cryptocurrency assets, reflecting an increasing demand for such products in the market. Model portfolios, which offer pre-designed strategies for financial advisors, have seen rapid growth, and BlackRock’s CEO, Larry Fink, who previously expressed skepticism about cryptocurrencies, seems to be adopting a more favorable stance towards Bitcoin.
IBIT, launched in January 2024, reached $60 million in assets under management faster than any ETF in the industry’s history. Despite recent market challenges leading to a drop of over $1 billion in assets in just seven trading days, IBIT still maintains approximately three times the assets of its closest competitors.
Overall, while the introduction of IBIT into BlackRock’s model portfolios may drive some demand for the fund, analysts suggest that the actual impact on inflows may be relatively modest in the near term, potentially amounting to millions rather than billions.
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