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BlackRock has urged financial advisors to reassess diversification strategies as stock and bond correlations remain elevated. The firm said traditional 60/40 portfolios have lost reliability since 2020 due to rising volatility and tighter relationships among asset classes. In a May 6 report, BlackRock outlined how Bitcoin, gold, and liquid alternatives may help diversify multi-asset portfolios.
BlackRock said geopolitical and economic shocks have reduced the effectiveness of traditional diversification tools. It added that bonds no longer provide the same hedge against equity drawdowns as they did in the 2010s.
In its report, “How to diversify with bitcoin, gold and alternative investments,” BlackRock presented correlation data suggesting Bitcoin can behave differently from equities. The firm reported that Bitcoin posted a 0.53 correlation with the S&P 500 from 2022 through the first quarter of 2026. Over the same period, gold recorded a 0.19 correlation with equities.
BlackRock also said the iShares Bitcoin Trust ETF has shown lower equity correlation than many traditional assets. The firm described Bitcoin as a “unique diversifier” because of distinct return drivers, linking long-term adoption to concerns about monetary stability and US fiscal sustainability, and to geopolitical and political stability factors.
BlackRock reiterated that a 1% to 2% Bitcoin allocation may suit multi-asset investors, while allocations above that range could sharply raise overall portfolio risk. It said advisors should fund Bitcoin exposure from equities due to Bitcoin’s volatility profile.
BlackRock highlighted gold as a complementary asset within diversified portfolios. It reported that Bitcoin and gold showed a 0.10 correlation from 2022 through early 2026, and said combining the two assets could enhance diversification benefits.
The firm noted that gold maintained a lower equity correlation than Bitcoin during the measured period, but emphasized that using both together may provide broader risk dispersion. It said the low correlation between Bitcoin and gold supports combined allocations.
BlackRock also promoted liquid alternative strategies within its Target Allocation with Alternatives models. The firm said these strategies aim to reduce portfolio risk without sacrificing upside potential, and that most alternative allocations draw funding from fixed-income positions.
Within its allocation framework, BlackRock treated Bitcoin differently from gold and alternatives, stating that Bitcoin requires equity funding due to higher volatility. It added that even small allocations can influence overall portfolio characteristics.
At press time, Bitcoin traded near $79,900 after falling 2% on the day. The cryptocurrency had briefly climbed above $82,000 earlier on Wednesday before losing momentum. Traditional markets also eased after posting gains over the previous month.
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