According to BlackRock, Bitcoin Is Still a Great Portfolio Diversifier. So How Much Bitcoin Should You Be Holding in Your Portfolio?

Bitcoin's (CRYPTO: BTC) price spiked more than 22% over the past two weeks as investors have grown increasingly concerned about macroeconomic news, including rising inflation, the ballooning national debt, and the U.S. Treasury's plan to increase bond purchases.

Owning some cryptocurrencies can be a good way to diversify your portfolio, but how much is the right amount? Investment firm BlackRock recommends allocating just 1% to 2% of a traditional 60/40 investment strategy (60% stocks, 40% bonds) to Bitcoin.

Here's why BlackRock recommends diversifying your portfolio with Bitcoin and why holding a smaller position is better than making big bets on the cryptocurrency.

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Why BlackRock thinks Bitcoin belongs in your portfolio

BlackRock recently released a Bitcoin report reiterating its position that owning some Bitcoin is a smart move, saying:

In our view, a measured allocation to Bitcoin is likely to remain compelling for many investors, serving as a potential strategic diversifier for long-term portfolio construction.

The firm showed Bitcoin's price has become less volatile in recent years, thanks to greater institutional adoption and the popularity of Bitcoin ETFs. It said that investors could potentially earn higher returns on their portfolios by allocating a small amount to Bitcoin.

The idea behind the firm's assumption is that some Bitcoin exposure -- while inherently risky -- has significant upside potential. So owning a small percentage of Bitcoin doesn't dramatically increase your risk, compared to the potential gains.

Why investors are reconsidering Bitcoin right now

BlackRock's latest Bitcoin report comes just as investors began warming to the cryptocurrency again. After falling from its all-time high in late 2025, Bitcoin's value has spiked over the past couple of weeks as investors have grown concerned about rising inflation and the national debt.

The latest data showed that inflation rose to 3.3% in July, surpassing the Federal Reserve's target of 2%. Investors are worried that inflation could continue heating up, even as the job market has stagnated. They're also concerned that the national debt crossed the $40 trillion mark, more than double what it was 10 years ago.

What's more, the U.S. Treasury Department recently announced it's nearly doubling its long-term bond buyback program. The decision is largely seen as a move to calm bond markets that have been spooked because of the economic data.

The combination of all this news has sent investors in search of safe havens for some of their money, pushing Bitcoin and gold prices higher.

Allocating 1% to 2% of your portfolio toward Bitcoin might not be a bad strategy. It's a conservative percentage that shouldn't weigh too heavily on your portfolio if Bitcoin falls dramatically again. And at the same time, it will allow you to benefit from major Bitcoin price upswings when they come. But only do so if you're comfortable with the additional risks and OK with adding some volatility to your investments.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and BlackRock. The Motley Fool has a disclosure policy.