BlackRock Revisits Bitcoin Investment Thesis After Sharp Price Decline
BlackRock has updated its analysis of Bitcoin following one of the asset's most significant selloffs, occurring after it reached a record high in October 2025. The firm examined whether Bitcoin still serves as an effective portfolio diversifier despite losing nearly half its value from that peak. BlackRock attributed much of the decline to market deleveraging and shifting investor flows rather than any fundamental breakdown in Bitcoin's long-term investment case. The report highlights Bitcoin’s “dual personality,” noting how it can behave like a risk asset during selloffs but diverge under geopolitical stress. The firm maintains that its historical correlation with traditional markets has been episodic, not structural. BlackRock recommends maintaining small allocations—1–2% in a 60/40 portfolio—to improve long-term risk-adjusted returns. The analysis builds on earlier research from September 2025 and now includes stress-testing against the recent drawdowns. The firm also emphasized Bitcoin’s evolving role within portfolios, particularly for institutional investors using its iShares Bitcoin Trust ETF (IBIT), which holds $48 billion in net assets despite a year-to-date decline of over 26%.
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Topics: Bitcoin BlackRock portfolio diversification price selloff