What to know:
- BlackRock says Bitcoin’s long-term diversification case remains intact despite its sharp market decline.
- The firm suggests a 1%–2% Bitcoin allocation could complement a traditional 60/40 portfolio.
- BlackRock attributes Bitcoin’s recent 50% drop mainly to deleveraging and shifting investment flows.
BlackRock Bitcoin research has been reassessing the case for investment in Bitcoin after a steep fall in the course of the ongoing market cycle. The company is assessing whether the cryptocurrency will continue to offer diversification benefits to investors.
The report, entitled Re-Underwriting Bitcoin: Still a Portfolio Diversifier and dated Aug. 17, has analyzed the behavior of Bitcoin during the last market downturn and assessed whether the underlying assumptions remain true.
Bitcoin has declined by about 50% from its high of over $126,000 hit in October 2025. Bitcoin had been trading at around $64,700, and according to BlackRock, the drop can be attributed to “deleveraging in the markets” and a shift in investment flows, not a change in the Bitcoin story.
BlackRock Bitcoin Research Supports Measured Exposure
BlackRock said that the recent sell-off showed the “split personality” of Bitcoin. This cryptocurrency could act in the same direction as stocks and other risky assets when there is a reduction of positions in the market.
As per BlackRock, while Bitcoin has had moments of higher correlations with mainstream assets, this hasn’t been strong enough to impact its position in the portfolio.
BlackRock Bitcoin revised analysis over a period of 10 years suggests that a smaller investment in Bitcoin can be appropriate. According to BlackRock, an investment in Bitcoin from 1% to 2% can add value to a standard 60/40 portfolio.
The strategy takes into consideration the volatile nature of Bitcoin and also allows investors to gain exposure to Bitcoin.
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Bitcoin Investment Case Faces a Major Test
The latest BlackRock Bitcoin report is based on the research conducted by the company in September 2025. In its previous report, the company stated that Bitcoin could not be characterized as either a risk-on or risk-off investment due to different drivers of returns in comparison with stocks.
The recent market fall served as a practical check for the point made by the company. Bitcoin set a record high above $126,000 in October 2025 before a massive deleveraging caused a market downturn.
At the time of writing, BTC is trading at $64,263, which is about 44% lower year-to-date and close to 49% off its record high.
The most recent analysis by BlackRock emphasizes the significance of considering the evolving correlation of Bitcoin and the issue of portfolio size. Instead of recommending investors stay away from Bitcoin due to its volatile nature, BlackRock believes that investors should limit their exposure.
Institutional Demand Remains Strong
Moreover, BlackRock is directly exposed to Bitcoin via its iShares Bitcoin Trust ETF, or IBIT, which was introduced in January 2024. The net asset value of the ETF stood at about $48 billion as of Aug. 17, 2024, even though it has been underperforming this year.
The new BlackRock Bitcoin analysis changes the conversation from Bitcoin’s volatility to whether a small amount of Bitcoin will help enhance the performance of your entire portfolio for both individual and institutional investors.
According to BlackRock Bitcoin latest report, the volatility of the asset should not be considered an obstacle to using it as a portfolio diversifier.
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This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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