Key Points
- BlackRock has released a report highlighting Bitcoin’s unique asset diversification attributes.
- The report also notes Bitcoin’s potential for solving core monetary issues and its uncorrelated behavior with traditional assets.
BlackRock, the world’s leading asset manager, has recently released an in-depth report on Bitcoin (BTC).
Bitcoin’s Unique Diversification Potential
The report was authored by BlackRock executives Samara Cohen, Robert Mitchnick, and Russell Brownback, who occupy high-ranking positions within the company. Their roles add significant weight to the report’s findings.
The report emphasizes Bitcoin’s uniqueness as a limited asset, with a capped supply of 21 million coins. This contrasts with traditional currencies like the U.S. dollar, which can be printed without limit by the Federal Reserve.
The report also details Bitcoin’s cross-border transaction capabilities, despite the higher transaction costs compared to fiat currencies. This has led to the rise of stablecoins like Tether (USDT) and USD Coin (USDC) for cross-border payments.
Furthermore, the report underscores Bitcoin’s decentralization, highlighting its independence from any central authority.
Bitcoin’s Uncorrelated Performance
BlackRock’s report also points out Bitcoin’s uncorrelated performance with traditional assets like stocks and gold. The cryptocurrency has shown strong performance since its inception, often outperforming the S&P 500 and gold during times of global risk.
The report also highlights Bitcoin’s performance during the U.S.-Iran tensions in January 2020 and the Covid-19 outbreak in March 2020, where it outperformed traditional assets.
BlackRock also sees Bitcoin as a valuable asset in light of the rising U.S. public debt, which currently stands at over $35.2 trillion.
The importance of BlackRock’s views on Bitcoin cannot be understated, given its significant role in the global economy. The company manages over $10.7 trillion in assets, equating to 41% of the American GDP. It is also a major player in the spot Bitcoin ETF industry.
The report was released as Bitcoin continues to consolidate around the $60,000 mark. The cryptocurrency’s short-term outlook remains neutral, with potential for a bullish breakout or further decline.