Bitcoin Belongs In An 'Ideal' Portfolio, Says BlackRock Executive, But Thinks A 5% Allocation Is High

Core Insights - Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock, advocates for an investment portfolio that includes hard assets like gold and Bitcoin [1][2] - Rieder suggests that Bitcoin should be considered as a hedge against currency depreciation, although he finds a 5% allocation to Bitcoin in a portfolio to be "high" [2][3] - BlackRock previously recommended a 1-2% allocation for Bitcoin in multi-asset portfolios, indicating that exceeding 2% could increase portfolio risk disproportionately [4] Bitcoin and Gold Allocation - Rieder's Global Allocation Fund has a 3 to 5% exposure to gold, viewing it as a better hedge against currency fluctuations compared to Bitcoin, which he notes tends to correlate with the Nasdaq [3][4] - Billionaire hedge fund manager Ray Dalio recently suggested a 15% allocation to either gold or Bitcoin, indicating differing views on the appropriate level of exposure [4] Market Behavior of Bitcoin - Bitcoin has been marketed as an inflation hedge but has shown behavior more akin to a risk-on asset, being sensitive to macroeconomic events [5] - A report from Franklin Templeton highlights that Bitcoin's price correlation with the Nasdaq has increased significantly over the past three years, while showing no significant correlation with gold [6] - As of the latest data, Bitcoin was trading at $112,351, reflecting a 0.52% decrease in the last 24 hours [6]