Bitcoin jumped nearly 6% after the world's largest asset manager released a white paper highlighting the digital asset's potential as a hedge against financial and geopolitical risks.
BlackRock has released a white paper on Bitcoin (BTC), highlighting its appeal to investors as a âunique diversification toolâ separate from traditional financial and geopolitical risks.
Bitcoin price bottomed just before Bloombergâs top ETF analyst Eric Balchunas shared the nine-page document at 4:21 p.m. UTC on September 18 in a post.
Since then, Bitcoin has recovered more than 5.7%, temporarily reclaiming the $62,600 mark for the first time in more than three weeks.
Some analysts are predicting that Bitcoin could rally in the next three months to $92,000, which could begin in October, based on historical chart patterns and Bitcoinâs average monthly returns in the fourth quarter of the year.
Bitcoin Can Hed Financial and Geopolitical Risks: BlackRock
BlackRock's white paper points out that Bitcoin's decentralized and permissionless nature makes it âthe world's first truly open monetary system,â not just a cryptocurrency.
The asset manager also praised Bitcoin for not having âtraditional counterparty risk,â or reliance on centralized systems. The white paper states:
âThese characteristics make it an asset that is largely insulated (fundamentally) from a number of key macro risk factors, including systemic banking crises, sovereign debt crises, currency devaluations, geopolitical disruptions, and country-specific political and economic risks.â
To highlight Bitcoinâs resilience, the asset management giant shared a chart showing how Bitcoinâs returns have outperformed the S&P 500 and gold prices during major geopolitical events in the past.
Bitcoin Adoption Will Be Driven by Global Financial and Geopolitical Concerns
The path of Bitcoin adoption will depend on the level of macroeconomic concerns, according to BlackRock's white paper.
âIn the long term, the trajectory of Bitcoin adoption will likely be driven by the extent to which concerns about global financial instability, geopolitical discord, US fiscal sustainability, and US political stability rise and fall.â
BlackRock is the world's largest Bitcoin exchange-traded fund (ETF) issuer, holding over $21.4 billion worth of BTC, accounting for over 38% of the Bitcoin ETF market, according to data from Dune data.
