BlackRock's latest research reassesses Bitcoin's effect on diversified portfolio risk and returns after an approximately 50% decline from its October 2025 high. The rolling 10-year analysis through May 29, 2026, showed a traditional 60/40 portfolio with an annualized return of approximately 9.9%. The portfolio had annualized standard deviation of roughly 10.1%. A 1% Bitcoin allocation raised annualized return to approximately 10.9%. The allocation raised annualized standard deviation to roughly 10.3%. A 2% Bitcoin allocation raised annualized return to approximately 11.8%. The allocation raised annualized standard deviation to about 10.6%. The 2% allocation added roughly 190 basis points of annualized return relative to the traditional portfolio. It increased annualized volatility by approximately 50 basis points. The portfolio's Sharpe ratio rose from 0.81 to 0.96. Maximum drawdown changed from -20.3% to -20.9%. BlackRock describes Bitcoin's risk and return drivers as fundamentally different from those of traditional assets. BlackRock links those differences to Bitcoin's fixed supply, decentralized structure and independence from any sovereign issuer. BlackRock's analysis says the historical trade-off remained favorable at 1% and 2% allocations after the drawdown. Earlier BlackRock research concluded that a 1% to 2% allocation could represent a reasonable range for investors able and willing to accept Bitcoin's risk. BlackRock found that Bitcoin at those weights could contribute a similar share of overall portfolio risk as an individual mega-cap technology holding in a conventional 60/40 portfolio. Bitcoin's contribution to total portfolio risk begins to increase disproportionately beyond 2%, according to the earlier research. The newer analysis showed Sharpe ratios of 0.90 with 1% Bitcoin and 0.96 with 2% Bitcoin. BlackRock says the appropriate exposure depends on liquidity requirements, investment horizon, governance constraints and risk tolerance. BlackRock launched the iShares Bitcoin Trust, or IBIT, in January 2024. IBIT accumulated more than $50 billion in assets in less than a year. BlackRock has described IBIT as the largest exchange-traded product launch in history. IBIT reached that milestone roughly five times faster than the previous record holder. BlackRock describes IBIT as the world's largest and most traded Bitcoin ETP. IBIT became BlackRock's highest-revenue ETF in 2025. The U.S. spot Bitcoin ETFs collectively held approximately 1.25 million BTC, according to current holdings data tracked by Bitcoin For Corporations. That amount represented nearly 6% of Bitcoin's fixed 21 million supply. IBIT accounted for roughly 775,000 BTC. That amount represented more than 60% of the Bitcoin held across the U.S. spot ETF complex. BlackRock's analysis associates the drawdown with the unwinding of leveraged positions, slowing ETP flows and weaker demand from companies accumulating Bitcoin. BlackRock characterizes those forces as a positioning correction rather than a fundamental change in Bitcoin's investment case. BlackRock also argues that fiscal sustainability, monetary stability and geopolitical risk may become increasingly relevant to Bitcoin's long-term adoption. The research does not establish what Bitcoin will return over the next decade. IBIT's performance does not establish an appropriate allocation for investors.
BlackRock's Bitcoin Portfolio Analysis Holds After 50% Drawdown
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Summary
BlackRock’s latest analysis shows Bitcoin maintains a strong risk-to-reward ratio in asset allocation strategies despite a 50% drawdown from its October 2025 peak. Through May 29, 2026, a 1% Bitcoin allocation boosted annualized returns to 10.9%, while a 2% stake raised returns to 11.8%. Volatility rose slightly, but the Sharpe ratio improved to 0.96 with the 2% allocation. The firm notes Bitcoin’s unique risk-to-reward profile stems from its fixed supply and decentralized structure. BlackRock’s iShares Bitcoin Trust (IBIT), launched in January 2024, now holds over $50 billion. The firm views the drawdown as a correction, not a shift in Bitcoin’s investment case.
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