In a surprising turn of events, BlackRock’s Michael Gates has taken to social media to talk about Bitcoin [BTC]. He discussed how Bitcoin’s position in portfolios has changed and how it can be seen as a ‘complementary diversifier’.
Gates said:
For decades, investors have relied on traditional assets, stocks for growth and bonds for stability. But how much Bitcoin exposure actually belongs in a portfolio?
He added,
The BlackRock Investment Institute has found this to be a modest allocation [1-2%] can potentially impact portfolio returns without dominating daily risk.
BlackRock knows why crypto is facing a recession
Meanwhile, BlackRock Managing Director Robbie Mitchnick claimed that Bitcoin’s recent underperformance is mainly due to greater capital rotation towards artificial intelligence.
According to him, the trend extends beyond cryptocurrency because, while AI-related companies continue to attract significant funding, investor interest in gold, precious metals and other non-AI assets has also waned.
All of this is happening while the cumulative ETFs are experiencing outflows due to massive withdrawals from the Bitcoin ETF and Ethereum. [ETH] ETF.
Mitchnick also believes that the reason for the shift from cryptocurrency to AI is due to the sharp decline in Bitcoin’s price from its late 2025 high and the continued withdrawals from ETFs.
However, Mitchnick thinks that the current environment is only temporary and that macroeconomic considerations could change the situation for Bitcoin for the better.
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 Bitcoin infrastructure.
Unlike BlackRock’s IBIT, which primarily monitors changes in the price of bitcoin, BITA combines exposure to the cryptocurrency with a covered call strategy designed to provide investors with monthly option premiums.
Final summary
- BlackRock’s suggestion of a small Bitcoin allocation of 1 to 2% in this bearish market raises concerns.
- However, Mitchnick understands how AI is the reason behind the shift from crypto to AI.