Finance giant BlackRock is saying that Bitcoin (BTC) is a unique investment opportunity offering investors something much different than traditional assets.
BlackRock, a firm with over $10 trillion in assets under management, says in a new report that Bitcoin could act as a hedge against the United States’ mounting debt and other macroeconomic concerns.
“While Bitcoin has shown instances of short-term co-movements with equities and other ‘risk assets,’ over the longer term its fundamental drivers are starkly different, and in many cases inverted versus most traditional investment assets. As the global investment community grapples with rising geopolitical tensions, concerns over the state of US debt and deficits and increased political instability around the world, Bitcoin may be seen as an increasingly unique diversifier against some of these fiscal, monetary and geopolitical risk factors investors may face elsewhere in their portfolio.”
The report says the appeal of alternative reserve assets is growing amid concerns over the potential impact of US federal deficits and debt on the dollar.
“This dynamic appears to be also taking hold in other countries where debt accumulation has been significant. In our experience with clients to date, this explains a substantial portion of the recent broadening institutional interest in Bitcoin.”
BlackRock’s iShares Bitcoin Trust (IBIT) launched earlier this year, among other Bitcoin exchange-traded funds (ETFs). Bitcoin ETFs grant traders exposure to the top crypto asset without them having to actually purchase it.
Bitcoin is trading for $62,098 at time of writing, up nearly 4% in the last 24 hours.
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