BlackRock Likens Bitcoin (BTC) Risk Profile to the Magnificent 7 Stocks, Recommends 2% Allocation

BlackRock recently made an interesting comparison between Bitcoin (BTC) and the Magnificent 7 stocks. According to Forbes, the giant asset manager likened the prime cryptocurrency’s risk profile to the said stocks.

BlackRock compared Bitcoin’s risk profile to the Magnificent 7 stocks and suggested allocating 1-2% of holdings in the digital asset for a similar risk exposure.

The source, citing BlackRock’s research, highlighted that a 1% to 2% allocation in Bitcoin would yield the same risk profile as the Magnificent 7 stocks.

The research also found a high correlation between BTC and the Magnificent 7 stocks but noted that a divergence could occur soon.

Several factors that could influence them to split paths include the fragmentation of the financial system, geopolitical tensions, declining confidence in the traditional financial system, and growing government deficit.

The report follows Microsoft’s rejection of MicroStrategy’s pitch for the tech giant to back its reserves in Bitcoin.

In a presentation, MicroStrategy’s Executive Chairman Michael Saylor pointed out that embracing the digital asset could drive Microsoft’s value creation by up to $4.9 trillion and increase its share price by up to $584.

During this Thursday’s peak price of over $101K per BTC, Bitcoin’s market cap has once again touched the $2 trillion level.

This solidifies the digital asset’s seventh position among the world’s top tradeable assets by market cap, trumping Saudi Aramco by around $200 billion.

The Magnificent 7 stocks include Apple, Amazon, Tesla, Nvidia, Meta (Facebook), Alphabet (Google), and Microsoft.

So far, Bitcoin has already overtaken Meta and Tesla in overall valuation. Alphabet is just next to BTC in the rankings, with a nearly $400 billion gap between them.

At this rate, the crypto asset has to rise to more than $120K per BTC to match those numbers, which would indicate a 19% climb from the prevailing exchange.

In related news, Bitwise’s latest prediction could position Bitcoin toward a rally that would surpass all the Magnificent 7 stocks.

Currently, Apple has the highest market cap in the group, with a valuation of around $3.73 trillion.

The crypto exchange-traded fund (ETF) issuer boldly predicted that Bitcoin could be poised to climb by up to $200K if the upcoming administration of President Donald Trump would continue pushing for a BTC strategic treasury reserve.

This would pump the premier crypto’s market cap to approximately $3.96 trillion.