Billionaires Are Buying a BlackRock ETF That Could Soar Up to 800%, According to Wall Street Experts

Given the meteoric rise of Bitcoin (BTC 0.41%) during the past decade, it’s perhaps no surprise that billionaire investors are starting to add it to their portfolios in size. Leading the way are billionaire hedge fund managers, who have chosen a BlackRock (BLK +0.01%) exchange-traded fund (ETF) — the iShares Bitcoin Trust (IBIT 3.75%) — as their preferred entry point into crypto.

Based on recent Securities and Exchange Commission 13F filings, it’s now possible to see exactly how much they are holding, and then track their activity each quarter. Let’s take a closer look.

Which billionaires hold Bitcoin?

One of the top holders of the iShares Bitcoin Trust is billionaire Israel “Izzy” Englander of Millennium Capital Management. His firm now holds 21.4 million shares of the ETF, worth an estimated $1.31 billion. In the most recent quarter, he upped his position by nearly 22%, adding 3.85 million more shares.

He’s hardly alone. Other notable billionaires who own sizable stakes in the iShares Bitcoin Trust include Alan Howard of Brevan Howard Capital Management (37.5 million shares), Steven Schonfeld of Schonfeld Strategic Advisors (5.66 million shares), Paul Tudor Jones of Tudor Investment (4.49 million shares), and Ken Griffin of Citadel Advisors (1.65 million shares).

Why are they buying Bitcoin?

These billionaires appear to have a twofold purpose in buying Bitcoin. First and most importantly, they are attracted to the enormous upside potential of Bitcoin. According to Wall Street experts, Bitcoin could hit a price of $1 million by the year 2030. Given Bitcoin’s current price of about $110,000, that represents an 800% return on investment.

But there’s another key reason billionaires are buying Bitcoin: Its ability to act as a portfolio diversifier and hedge against macroeconomic risk. One of the biggest proponents of Bitcoin’s ability to act as digital gold and a safe store of value is billionaire Paul Tudor Jones. He has publicly advocated for Bitcoin as one of the best possible hedges against macroeconomic turmoil and geopolitical risk.

The 1% rule for Bitcoin

Keep in mind: Just because these billionaires are accumulating Bitcoin at a rapid rate doesn’t mean that they are going all-in on Bitcoin. Only a few high-profile billionaires — including Michael Saylor of Strategy (MSTR 7.36%) and Ricardo Salinas (the third-richest person in Mexico) — are full-on Bitcoin maximalists.

Other billionaires are choosing to allocate anywhere from 1% to 2% of their portfolios to Bitcoin, but no more. Take Israel Englander, for example. While he currently stands as the second-largest holder of the iShares Bitcoin Trust, it only represents 1% of his overall portfolio. Or what about Paul Tudor Jones? Despite his banging the drum for Bitcoin, the BlackRock ETF represents only 2% of his total portfolio.

There’s a powerful lesson there from the world’s top billionaire hedge fund managers. A prudent investment strategy will allocate 1% to 2% to Bitcoin. If you are willing to take on significantly more risk, you might boost that allocation to 5%. But if you allocate much more than that to Bitcoin, you are likely taking on way too much risk.

That’s because Bitcoin is inherently a boom-or-bust asset. Yes, it’s been boom times for the past three years. But that doesn’t mean that a bust year isn’t lurking on the horizon. If history is any guide, Bitcoin tends to experience a huge decline every four years.

Should you buy the iShares Bitcoin Trust?

It’s perhaps no surprise that billionaires have embraced Bitcoin. They now view it as a strategic asset that needs to be in every investment portfolio.

Given Bitcoin’s impressive track record and its dazzling future outlook, it’s hard to argue with that notion. As long as you are prudent in how much you allocate to Bitcoin, this is a digital asset that you can buy and hold for years.