New research from the world’s largest asset manager argues that Bitcoin offers unique benefits as a portfolio diversifier while sharing a similar risk profile to S&P 500 juggernauts like Google, Amazon,

Going beyond that would sharply increase bitcoin’s share of the overall portfolio risk,” the report said. When considering Bitcoin, BlackRock suggests that in

BlackRock recommends that interested investors consider allocating as much as 2% of their portfolio to bitcoin, the world's largest cryptocurrency, the giant asset manager said in a report on Thursday.

BlackRock operates a massively successful Bitcoin ETF, but the asset manager still recommends being conservative with the cryptocurrency.

BlackRock said the risk of holding a certain amount of bitcoin is comparable to the risk generated by the Magnificent Seven mega-cap tech stocks.

BlackRock’s analysis indicates that a 1% to 2% Bitcoin weighting in a typical portfolio of stocks and bonds would have a similar risk profile to holding the “Magnificent Seven” tech stocks. The paper also emphasizes a “risk budgeting” approach, acknowledging Bitcoin’s volatility while recognizing its potential for diversification benefits.

The world’s biggest asset manager says that Bitcoin does have a place in multi-asset portfolios — up to a certain point.

BlackRock suggests a 2% Bitcoin allocation for diversified portfolios, highlighting benefits and risks of the volatile asset.

Bitcoin’s potential for returns is undeniable, but BlackRock, the world’s largest asset manager, is telling investors to pump the brakes. In its latest analysis, the company recommends keeping Bitcoin allocations to a cautious 1-2% of a portfolio.