Blackrock, the largest asset manager in the world, has published a comprehensive report on Bitcoin. In a report, BlackRock executives Samara Cohen
World’s largest asset manager Blackrock has published a comprehensive report on Bitcoin.
In a report, BlackRock executives noted that Bitcoin (BTC) is a unique asset for diversification.
According to the executives, Bitcoin solves core money problems, is uncorrelated with stocks and gold, and is a good asset to own as the US public debt rises.
However, the report also notes that Bitcoin is stuck in a range as traders await the Federal Reserve’s decision.
BlackRock’s views on Bitcoin are important because of its role in the global economy. In its latest financial results, the company revealed that it had over $10.7 trillion in assets.
BlackRock is also the biggest player in the spot Bitcoin ETF industry, with over $21 billion in assets.
BlackRock executives who authored the report are:
* Samara Cohen, Chief Investment Officer of ETF and index investments.
* Robert Mitchnick, the company’s head of assets.
* Russell Brownback, who heads global positioning for fixed income.
Here are the key highlights from the BlackRock report on Bitcoin:
BlackRock executives believe that Bitcoin is a unique asset for diversification purposes. They noted that it is a limited asset with a supply cap of 21 million coins, unlike other forms of money. For example, there is an unlimited supply of U.S. dollars since the Federal Reserve has the final say on how much to print. During its last quantitative easing program, the Fed boosted its balance sheet from less than $5 trillion to $8.9 trillion.
They also believe that Bitcoin makes it easier for people to move money across borders. While this is true, Bitcoin transactions tend to be more expensive than sending fiat currencies. As a result, stablecoins like Tether (USDT) and USD Coin (USDC) have emerged as the most popular digital currencies for cross-border payments.
Additionally, they noted that Bitcoin is a truly decentralized global monetary system not controlled by a central authority.
According to BlackRock, Bitcoin is also a highly uncorrelated asset and has a long track record of strong performance. It has risen by over 807,000x since its inception. The coin often outperforms traditional assets like the S&P 500 and gold when global risks rise.
For example, its 60-day return during the U.S. and Iran tensions in January 2020 was 20%, while the S&P 500 dropped by 7% and gold rose by 6%. Bitcoin also rose by 21% after the Covid outbreak in March 2020, while the S&P 500 and gold increased by 2% and 3%, respectively.
Additionally, Blackrock believes that Bitccoin is a good asset as the US public debt rises. The latest data by the National Debt Clock shows that the country has over $35.2 trillion in debt and is now spending $1 trillion to service it. In an opinion piece, the Wall Street Journal warned that a national debt crisis was coming.
Bitcoin also outperformed traditional assets during other major events like the Russia’s invasion of Ukraine and the recent yen carry trade unwinding.
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