BlackRock Adds iShares Bitcoin Trust (IBIT) to Model Portfolios

BlackRock has added the iShares Bitcoin Trust (IBIT), a fund that holds bitcoin (BTC), to one of its model portfolios.

These models suggest portfolios and rebalances, which are followed by advisors and platforms that can request adjustments based on their investment needs.

According to James Seyffart, ETF analyst at Bloomberg Intelligence, BlackRock incorporated a 1% to 2% allocation to IBIT in its target allocation portfolio that allows for alternative assets.

In a report from Thursday, Michael Gates, lead portfolio manager for BlackRock’s Target Allocation ETF models, highlighted multiple arguments supporting bitcoin’s long-term investment merit.

Gates mentioned these include bitcoin’s role as a novel store of value and a global monetary alternative, a hedge against U.S. dollar dominance and political instability, and its involvement in the digital transition of goods and services.

He stated, “Collectively, these features may help provide unique and additive sources of risk premia and diversification to traditional multi-asset portfolios.”

This model represents one of IBIT’s smaller portfolios; however, the addition is significant as it marks the first time BlackRock has included IBIT in any of their models.

Seyffart remarked, “This is a big deal because this is the first of those models to add bitcoin. It probably won’t be the last, but bitcoin is also a lightning rod for many—some will hate this while others will love it. So I don’t know if or when they would add IBIT to their primary models that manage a lot more money.”

BlackRock’s model portfolios currently manage around $130 billion in assets.