BlackRock Urges Advisors to Rethink Diversification with Bitcoin and Gold
BlackRock has advised financial advisors to rethink how they diversify investments. The firm pointed to higher volatility and stronger links between stocks and bonds since 2020. Its latest report suggests including Bitcoin, gold, and liquid alternatives to spread risk more effectively. The investment giant highlighted that traditional assets have moved more closely together in recent years. Stocks and bonds showed elevated correlations, reducing the benefits of holding both. Gold, however, remained less connected to equities, with a correlation of just 0.19 over the same period.
BlackRock described Bitcoin as a 'unique diversifier' due to its different return patterns. While its correlation with the S&P 500 sat at 0.53 between 2022 and early 2026, the firm still recommended a small allocation. A 1% to 2% Bitcoin holding could improve diversification for multi-asset investors, according to the report.
The analysis also found a low correlation of 0.10 between Bitcoin and gold. This relationship suggests that combining the two may further strengthen portfolio resilience. Alongside these, BlackRock promoted liquid alternative strategies in its Target Allocation with Alternatives models. These strategies aim to provide additional stability when markets fluctuate. The firm’s updated guidance encourages advisors to blend Bitcoin, gold, and liquid alternatives into portfolios. Such adjustments could help offset risks from tighter asset relationships and rising market turbulence. BlackRock’s models now reflect these recommendations to improve long-term diversification.
