Crypto is in a bear market, and spot bitcoin (BTC) ETF outflows are worsening the decline. Negative since February 1, investors have withdrawn net funds from BTC spot ETFs for 11 of their last 13 trading days.
However, a catalyst to reverse these outflows might have recently arrived when asset management giant BlackRock announced that it would begin recommending BTC in model portfolios for the first time.
According to new advice for clients who opt into strategies that permit alternative investments, BlackRock advisors will begin suggesting 1-2% portfolio sizing for the company’s spot BTC ETF, the iShares Bitcoin Trust ETF (Nasdaq: IBIT).
With CEO Larry Fink taking almost every opportunity to speak positively in media appearances about the world’s largest digital asset, he emboldened his lead portfolio manager of BlackRock target allocation ETF models, Michael Gates.
Gates gave the approval to allocate BTC to clients’ portfolios via the company’s IBIT product.
The maximum quantity of BlackRock model portfolios to which this BTC change could apply are worth a combined $150 billion.
Read more: Bitcoin supply may not be fixed at 21M, says BlackRock
Unsurprisingly, Gates’s choice of a 1-2% allocation to BTC reiterates the company’s “reasonable range” guidance from December, originally reported by Bloomberg.
Although some people interpreted the news as a decidedly bullish headline, even assuming the maximum 2% allocation across the maximum $150 billion worth of BlackRock’s model portfolios would only result in $3 billion of near-term buying. For context, BTC’s market capitalization is $1.6 trillion.
BTC is down 10% in the past seven days, dipping to $80,000 over the weekend despite an apparently “bullish” White House crypto summit last week.
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Source: https://protos.com/blackrock-wants-to-stop-bitcoin-etf-outflows-with-1-2-allocation-target/