Blackrock, the world's largest asset manager, has published a report on Bitcoin. The report discusses Bitcoin's unique features as an asset for diversification and protection against global economic risks.
Solving Core Money Problems
The report, prepared by Samara Cohen, Robert Mitchnick, and Russell Brownback from BlackRock, highlights that Bitcoin is a limited asset with a supply cap of 21 million coins. Unlike other forms of money, such as US dollars, which can be increased by the Federal Reserve, the amount of Bitcoin is fixed. Experts also noted that Bitcoin facilitates cross-border money transfers. Although Bitcoin transactions can be more expensive compared to fiat currency transfers, stablecoins like Tether (USDT) and USD Coin (USDC) have emerged as the most popular digital currencies for international payments. Bitcoin is also seen as a decentralized global monetary system.
Uncorrelated with Stocks and Gold
According to BlackRock, Bitcoin is a highly uncorrelated asset with a long track record of strong performance. Since its inception, its value has increased by over 807,000 times. During periods of heightened global risks, Bitcoin often outperforms traditional assets like the S&P 500 index and gold. For instance, in 2020, during the US-Iran tensions, Bitcoin's 60-day return was 20%, while the S&P 500 dropped by 7% and gold rose by 6%. A similar trend was observed during the Covid-19 pandemic. The report also states that Bitcoin can serve as a good asset amid the rising US public debt, which has recently surpassed $35.2 trillion.
Current Situation with Bitcoin
BlackRock's statement came as Bitcoin continues consolidating around the $60,000 mark. The coin is currently trading at the levels of the 50-day and 200-day moving averages. The short-term outlook for Bitcoin remains neutral. A bullish breakout will be confirmed if it moves above the upper descending trendline, while further downside could occur if the price drops below $52,000.
Blackrock's report underscores the importance of Bitcoin as an investment asset amid global economic shifts and rising US public debt. The company, managing over $10.7 trillion in assets, recognizes Bitcoin as a crucial element in modern investment strategies.
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