BlackRock has reaffirmed Bitcoin’s long-term diversification potential despite a steep 50% decline from its October 2025 high, suggesting a 1%–2% allocation could enhance a traditional 60/40 portfolio. The firm’s August 2026 report attributes the drop mainly to market deleveraging and shifting investment flows, not a change in Bitcoin’s fundamental story. BlackRock’s analysis over a ten-year period supports this measured exposure, emphasizing that Bitcoin’s volatility should not disqualify it as a diversifier. The iShares Bitcoin Trust ETF (IBIT) held a net asset value of roughly $48 billion as of August 17, underscoring continued institutional demand.
BlackRock has released a new report titled “Re-Underwriting Bitcoin: Still a Portfolio Diversifier,” dated August 17. The analysis examines Bitcoin’s behavior during the recent market downturn to assess if its diversification thesis remains valid.
Bitcoin has fallen about 50% from its high of over $126,000 reached in October 2025. According to BlackRock, this drop is driven by “deleveraging in the markets” and a shift in investment flows, not a change in Bitcoin’s underlying story.
The firm described the recent sell-off as revealing a “split personality” of Bitcoin. It noted that the cryptocurrency can move in the same direction as stocks during periods of position reduction.
BlackRock’s revised analysis, conducted over a ten-year period, suggests a smaller investment can be appropriate. Data shows that a 1%–2% Bitcoin allocation can add value to a standard 60/40 portfolio, accounting for the asset’s volatility.
This report builds on BlackRock’s September 2025 research, which argued Bitcoin could not be characterized as either risk-on or risk-off due to its different return drivers. The recent market fall served as a practical test of that earlier point.
Bitcoin set a record high above $126,000 in October 2025 before massive deleveraging caused a downturn. At the time of writing, Bitcoin is trading at $64,263, roughly 44% lower year-to-date and nearly 49% off its record high.
BlackRock is directly exposed to Bitcoin through its iShares Bitcoin Trust ETF (IBIT), launched in January 2024. The ETF’s net asset value stood at about $48 billion as of August 17.
BlackRock’s latest analysis shifts the conversation from Bitcoin’s volatility to whether a small allocation can enhance overall portfolio performance. The firm stated that the asset’s volatility should not be considered an obstacle to its use as a portfolio diversifier.
