In a surprising turn of events, BlackRock’s Michael Gates has taken to social media to talk about Bitcoin [BTC]. He discussed that Bitcoin’s position in portfolios has changed and how it could be seen as a “complementary diversifier.”
Gates said,
For decades, investors have relied on traditional assets, stocks for growth, bonds for stability. But just how much Bitcoin exposure belongs in a portfolio?
He added,
The BlackRock Investment Institute has found that a modest allocation [1-2%] could potentially have an impact on portfolio returns without dominating day-to-day risk.
BlackRock knows why crypto is facing a downturn
Meanwhile, BlackRock’s Managing Director Robbie Mitchnick asserted that the recent underperformance of Bitcoin is primarily due to a larger capital rotation toward artificial intelligence.
According to him, the trend goes beyond cryptocurrency because, while AI-related businesses continue to draw significant funding, investor interest in gold, precious metals, and other non-AI assets has also decreased.
All of this occurs as the cumulative ETFs experience outflows due to massive withdrawls from the Bitcoin ETF and Ethereum [ETH] ETF.
Mitchnick too belives that the reason for the shift from cryptocurrency to AI is becaue of the sharp decline in the price of Bitcoin from its late 2025 highs and the ongoing withdrawals from ETFs.
Mitchnick, however, thinks that the current climate is only temporary and that macroeconomic considerations could change things for good for Bitcoin.
BlackRock’s other initiative
All of this coincides with BlackRock’s announcement of the iShares Bitcoin Premium Income ETF [BITA], a new exchange-traded product based on the company’s spot Bitcoin infrastructure.
As opposed to BlackRock’s IBIT, which mainly monitors changes in the price of bitcoin, BITA combines exposure to the cryptocurrency with a covered-call strategy intended to provide investors with monthly option premiums.
Final Summary
- BlackRock’s suggestion for having a small 1–2% Bitcoin allocation in this bearish market is raising concerns.
- However, Mitchnick understands how AI is the reason behind the shift from crypto to AI.