BlackRock backs modest Bitcoin allocation as portfolio diversifier in AI era

BlackRock told financial advisors on Tuesday, June 23, that a small Bitcoin position, around 1% to 2% of a portfolio, could improve returns without blowing up risk budgets.

The recommendation came in a social media post from BlackRock’s official account, pointing investors to comments from Michael Gates and linking to the firm’s iShares Bitcoin Trust (IBIT) product page. 

BlackRock called Bitcoin a “complementary diversifier” whose role in portfolios “is evolving.”

However, while it is issuing this recommendation, the firm’s own digital assets chief acknowledged that the AI investment boom is pulling money away from Bitcoin.

Who is winning the capital allocation fight between AI and crypto?

Robbie Mitchnick, BlackRock’s head of digital assets, said in a recent interview that Bitcoin has had a tough stretch since October 2025.

He also pointed out that the pattern extends well beyond crypto, with gold, precious metals, and other non-AI assets all experiencing a decline in investor attention.

Artificial intelligence is the latest jewel, and investors have been showering the sector with funds.

Mitchnick stated that “the AI momentum is certainly sucking a lot of the oxygen out of the room.”

The numbers back him up as U.S.-listed spot Bitcoin ETFs have bled capital for over 45 consecutive days, with outflows crossing $7.8 billion over that stretch. Bitcoin itself traded near $62,100 on Monday, down from highs above $120,000 late last year.

IBIT, which was once a magnet for new money after its January 2024 launch, has not been immune to this crash. While the fund still holds nearly $49 billion in net assets, according to SoSoValue data, it recorded $171.96 million in single-day outflows on June 22.

Meanwhile, SpaceX’s recent IPO and the upcoming Anthropic IPO, which is reported to be targeting a $1 trillion valuation, are competing for the same institutional dollars that once flowed into crypto products

Which debt catalyst is BlackRock watching?

Mitchnick says that the current dynamic is temporary. He pointed to U.S. government debt levels and the federal deficit as the force most likely to reignite Bitcoin demand in the coming year.

“The more fear there is over the borrowing level and the risk of money printing, that is ultimately the most important fundamental driver ahead,” Mitchnick reportedly said.

He says the issue could come up again around the midterm elections, a period when fiscal policy debates tend to intensify. The other major variable, according to Mitchnick, is interest rates, noting that Bitcoin is “negatively exposed to rates” in a pattern similar to gold.

Is BlackRock still pushing crypto?

The allocation guidance comes a few days after BlackRock launched its iShares Bitcoin Premium Income ETF (BITA) on June 16, a covered-call fund that sells options on roughly a quarter to a third of its Bitcoin holdings each month to generate income.

Jay Jacobs, BlackRock’s U.S. head of equity ETFs, stated that the product targets an annual yield between 15% and 25%, though investors give up roughly 30% of Bitcoin’s upside in exchange.

BITA has a 0.65% sponsor fee and launched with about $10.5 million in net assets. The fund targets financial advisors, insurers, and pension funds that have avoided Bitcoin because it generates no cash flow.

Jacobs also coined what he called “The Great Convergence” between traditional and decentralized finance during an appearance on Cointelegraph’s Chain Reaction podcast.

He stated that approximately 75% of IBIT buyers had never owned any ETF before purchasing the Bitcoin fund. Many of those first-time ETF holders later moved into BlackRock’s S&P 500, gold, and AI-focused funds.

BlackRock manages more than $12-14 trillion, so, while the 1% to 2% recommendation is conservative by crypto-industry standards, that proportion entering into crypto markets is nothing short of a big deal.