BlackRock’s Revolutionary Step Towards Bitcoin
The world’s largest asset manager, BlackRock, is making a remarkable move towards Bitcoin. Beyond their recent spot ETF application, the firm is advocating for an audacious optimal portfolio allocation towards the world’s most prominent digital asset.
Economic pundits are scrutinizing prior BlackRock reports on the optimal portfolio balance concerning risk versus reward. Their analyses are overwhelmingly biased towards Bitcoin, a shift that could skyrocket its value if these recommendations are implemented.
Unveiling the BlackRock Bitcoin Strategy
On July 25, Joe Burnett of Blockware shed light on a 2022 BlackRock report on optimal Bitcoin allocation. The asset management giant proposed an 84.9% allocation to BTC, alongside 9.06% stocks and a mere 6.04% bonds. Burnett elaborated:
“If all investors follow BlackRock’s optimal BTC allocation, Bitcoin will be worth more than five times the total value of all equities, real estate, and bonds.”
Extrapolating from the current global wealth estimated at around $800 trillion, this would peg Bitcoin at a staggering $190 million per coin. Economist Alessandro Ottaviani echoed the sentiment, stating, “Sooner or later, it will be clear for everyone that Bitcoin is a must-have in every portfolio.“
BlackRock had previously noted, “Although Bitcoin has extremely large volatility, the pronounced positive skewness leads to large allocations and dominates in the utility function.”
Analyst ‘PlanB’ added fuel to the fire, asserting on July 25 that we are merely at the start of a bull market. He said:
“Of course BlackRock wants to buy cheap, just before ETF approval, and just before stage-2 full-blown bull market.”
The Implications for Bitcoin Spot ETF
James Seyffart, Bloomberg’s exchange-traded fund expert, recently outlined the critical dates for the ongoing Bitcoin ETF race. BlackRock lodged its spot ETF application in mid-June, with the SEC’s first response due by September 2.
Nonetheless, the Ark and 21Shares Bitcoin ETF refile is already past the initial deadline, nearing the second one on August 13. The preliminary deadlines for Bitwise, VanEck, Wisdomtree, Invesco, Fidelity, and Valkyrie are also set for early September.
Although the SEC has not yet approved a spot Bitcoin ETF, analysts are optimistic that BlackRock could be the trailblazer. Some speculate that the SEC is attempting to reign in the crypto ecosystem through these Wall Street behemoths.
