BlackRock’s Rieder: Bitcoin’s Rise Could Outpace Even the S&P 500

BlackRock’s Rick Rieder, the firm’s Chief Investment Officer of Global Fixed Income, recently shared insights on the Federal Reserve’s upcoming interest rate decision and outlined the firm’s current asset allocation strategy. Speaking on CNBC’s Halftime Report, Rieder predicted that the Fed would cut rates in its upcoming meeting. While he advocated for a 50 basis point reduction, he noted that the central bank was likely to implement a smaller cut of 25 basis points. “Interest rates will still start to fall,” Rieder said, emphasizing the broader trend of easing monetary policy.

The CIO described the current investment environment as “one of the best I've seen in my career,” pointing to strong corporate profit growth, transformative technological changes, and attractive fixed-income yields as key factors. Rieder highlighted that fixed-income yields near 6% represent “extraordinary” opportunities for investors. He also dismissed concerns about stagflation, noting that he expects U.S. nominal GDP growth to reach 4.6% this year, with real growth around 2%.

In addition to macroeconomic insights, Rieder commented on portfolio construction strategies. He recommended maintaining long-term exposure to technology-driven equities and suggested investors adopt a medium-term approach to fixed-income investments. Regarding alternative assets, Rieder said BlackRock maintains a limited allocation to gold and cryptocurrencies. The firm allocates between 3% and 5% to gold, while maintaining a lower exposure to digital assets, including Bitcoin.

Separately, BlackRock’s Chief Investment Officer (CIO) has advised investors to consider including Bitcoin in their 2025 portfolios. In a recent statement, the CIO expressed confidence in Bitcoin’s future performance, stating, “I just think it’s gonna go up.” The firm’s latest research suggests that even a small allocation—such as 1%—to Bitcoin could significantly enhance portfolio returns over time. BlackRock’s analysis highlights the potential for Bitcoin to outperform traditional assets like the S&P 500, despite its higher volatility.

The firm also outlined a recommended base allocation of around 2% to Bitcoin, which can be increased as investors become more comfortable with the asset’s volatility. BlackRock’s rationale is grounded in the idea that diversifying portfolios with Bitcoin—while managing risk—can yield higher returns without excessive exposure to market swings. The firm’s research also noted that combining Bitcoin with traditional assets like the S&P 500 can lower overall portfolio volatility while improving returns. Rieder emphasized the importance of personal risk tolerance and advised investors to tailor their allocations accordingly.

In broader market commentary, BlackRock’s Investment Institute highlighted a favorable environment for emerging markets. The firm cited three key drivers: a weaker U.S. dollar, improved macroeconomic conditions in several regions, and the influence of long-term “mega forces” like artificial intelligence and supply chain shifts. Emerging markets have outperformed developed ones this year, with equities up 20% compared to 14% for developed markets. BlackRock suggested a cautious approach to broad emerging market equities while favoring specific bright spots and local-currency debt.

The firm also noted that the U.S. Federal Reserve’s upcoming interest rate decisions could influence central banks in emerging markets to follow suit with rate cuts, potentially supporting growth and investment returns. This aligns with Rieder’s earlier remarks on the Fed’s easing path, further reinforcing BlackRock’s view that lower interest rates will remain a defining trend in the near term.

As BlackRock continues to refine its views on global markets, its recent statements underscore both a cautious optimism and a strategic emphasis on diversification, particularly in the context of evolving monetary policy and the growing role of digital assets like Bitcoin in modern portfolios.