Weekly Update: 18th of December
What happened between the 11th and 18th of December?
- BlackRock, the world’s largest asset manager, recommends up to a 2% bitcoin allocation in an investment portfolio. Read more
- Alabama should establish a Bitcoin reserve, says a state auditor, while a Texas lawmaker proposes a bill to establish a strategic reserve. Read more
- MicroStrategy, a business software company and holder of over 400,000 Bitcoin enters the Nasdaq-100 index, bringing Bitcoin exposure to millions of investors. Read more
BlackRock recommends up to 2% Bitcoin allocation
On December 12th, BlackRock, the world’s largest asset manager, released a report stating that an allocation of up to 2% is reasonable for investors wishing to add Bitcoin to their portfolio. According to BlackRock, a 1-2% BTC investment offers "on average, about the same share of overall portfolio risk" as a typical allocation to "the magnificent 7" group of mostly mega-cap tech stocks in a portfolio made up of 60% equities and 40% fixed income. Furthermore, the report highlights that investors need to view Bitcoin’s expected returns differently—not by examining underlying cash flows, which Bitcoin doesn’t have, but by researching the extent of its adoption. Nevertheless, it’s exciting to see that Bitcoin is cementing itself in traditional portfolios, and hopefully, we will see other assets included as well.
US states discuss strategic Bitcoin reserve
On December 11, Alabama State Auditor Andrew Sorrell stated that the state of Alabama should establish a Bitcoin strategic reserve. Sorrell highlighted the fact that “crypto is here to stay” and that the competition among states to benefit from it has begun. Additionally, he emphasized the importance of diversifying away from the US dollar, citing inflation risks and the potential loss of its reserve status. He pointed out that Bitcoin is unaffected by the US dollar.
A day later, on December 12, Giovanni Capriglione, a lawmaker in the Texas House of Representatives, drafted legislation to create a Bitcoin reserve as part of the state’s treasury. The proposed law stated that Texans or "governmental entities" may voluntarily contribute their Bitcoin to the reserve. However, unlike plans for national Bitcoin reserves, it made no mention of any cryptocurrency that could be seized by police.
Microstrategy enters the Nasdaq-100 Index
On December 14th, news broke that MicroStrategy, a business software company with over 400,000 Bitcoins on its balance sheet, will be included in the Nasdaq-100 index. This index tracks the 100 largest non-financial companies listed on the Nasdaq exchange, including names such as Apple, Nvidia, Microsoft, and more. This is a monumental development, as ETFs tracking this index will become automatic buyers of the company. This includes one of the world’s biggest ETFs, the Invesco QQQ Trust, which has $325 billion in assets. This potential capital inflow has many market participants speculating that it will increase MicroStrategy’s stock price, allowing the company to acquire even more Bitcoin in the coming years or even months. MicroStrategy is set to enter the index on December 23, 2025.
In other digital assets news
- Layer 1 network Solana overthrows its competitor Ethereum’s 8-year reign as the top ecosystem for new developers.
- Avalanche raises $250 million from more than 40 investment firms.
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