BlackRock conducted a study assessing the level of risk that private and corporate Bitcoin investors may face when investing in the first cryptocurrency or traditional assets.
BlackRock analysts concluded that Bitcoin, with its high volatility, falls into the category of risky assets. However, most risk factors and potential returns faced by Bitcoin investors are fundamentally different from those of traditional risky assets in the stock market.
Despite the volatility and speculative nature of digital currencies, BlackRock suggests including Bitcoin in traditional investment portfolios, allocating a share of 1-2%. The company's experts stated that the risk of an investment portfolio that includes Bitcoin is comparable to the risk profile of a traditional portfolio that includes securities of technology giants like Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), or Nvidia (NASDAQ:NVDA).
At the same time, Bitcoin, as a scarce, non-sovereign, and decentralized global asset, has low value correlation compared to traditional stock market assets. This, according to BlackRock analysts, allows BTC to be viewed as one of the options for hedging risks during times of rampant inflation and significant political events.
Earlier, a similar suggestion was made by the founder of Interactive Brokers Group, Thomas Peterffy. The businessman recommended that investors allocate 2-3% of their portfolio to Bitcoin to diversify their investments without exposing themselves to the risks of cryptocurrency volatility.