BlackRock: 1% allocation to cryptocurrencies in Asia could attract US$ 2 trillion to the market

BlackRock executive Nicholas Peach said that a small shift in Asian portfolio allocations towards cryptocurrencies could generate a significant flow of capital into the market.

During a panel at Consensus Hong Kong, he said that a recommendation of just 1% in crypto for standard portfolios in Asia could drive almost US$ 2 trillion to the sector, second CoinDesk.

Peach pointed out that household wealth in the region amounts to around US$ 108 trillion in total assets. For him, modest adjustments to traditional investment models would be enough to have a significant impact on the crypto market.

The speech comes amid strong demand for BlackRock's cryptocurrency ETFs, especially via iShares. The Bitcoin ETF on the horizon in the US, IBIT, launched in January 2024, has already accumulates almost US$ 53 billion under management.

He also stated that Asian investors have a relevant weight in the flows to crypto ETFs listed in the US. At the same time, regulators in markets such as Hong Kong, Japan and South Korea are making progress in expanding these offerings, signaling greater institutional openness to the asset class in the region.

Bitcoin has potential, says BlackRock CEO

Last year, Larry Fink, CEO of BlackRock, made a symbolic move: left the position of Bitcoin critic to publicly recognize its potential. He went on to define the asset as a protection sought in times of financial insecurity, geopolitical tensions and loss of purchasing power of state currencies.

At the same time, Fink warned of volatility and the weight of leveraged players in the market, which makes the short term riskier. Even so, he admitted that, as a long-term hedge, Bitcoin can act as relevant insurance within portfolios.

Also last year, BlackRock expanded global access to the asset by launching the iShares Bitcoin ETF (IBIT) in Australia. The world's largest asset manager listed the product on the Australian Securities Exchange (ASX) under the ticker IBIT, offering local investors regulated exposure to Bitcoin through the traditional ETF structure - an important step in the institutionalization of the market.

At that time, Bitcoin was trading close to all-time highs, above US$ 100 thousand. Today, it is around 30% below those levels, quoted at around US$ 68 thousand.