As one of the world's largest asset management companies, BlackRock has become increasingly positive about Bitcoin and crypto assets, and even believes that Bitcoin is no longer a pure risk asset. This view can be explained from the following aspects:
1. The unique nature of Bitcoin
Scarcity and Fixed Supply: The supply of Bitcoin is limited to 21 million, which means it is not subject to inflation like traditional currencies, thus maintaining its scarcity and value stability.
Decentralized and permissionless: Bitcoin’s decentralized and permissionless nature makes it the world’s first truly open-access monetary system that is not controlled by any single country or institution.
Globality and digital nativeness: Bitcoin can be transferred around the world in almost real time at near-zero cost, breaking the geographical and time limitations of the traditional financial system.
2. Bitcoin’s Market Performance
Significant long-term returns: Despite Bitcoin’s volatility, it has outperformed all major asset classes in seven of the past ten years, with annualized returns of over 100%. This shows the potential of Bitcoin in long-term investing.
Low correlation with traditional assets: Bitcoin has a low long-term correlation with traditional asset classes such as stocks and bonds, and its fundamental drivers are significantly different from those of most traditional investment assets, and in some cases are even opposite.
3. Bitcoin’s safe-haven properties
Performance in uncertain times: Bitcoin is sometimes seen as a safe-haven asset when global financial markets face uncertainty, such as trade wars, geopolitical tensions, etc. In particular, when certain disruptive events occur, the price of Bitcoin tends to experience a short-term negative reaction first, but then rebound.
Potential for Hedging Dollar Risks: As U.S. and global concerns over the U.S. federal deficit and debt situation intensify, so does Bitcoin’s appeal as a potential alternative reserve asset. This trend is also emerging in other countries with significant debt accumulation.
4. BlackRock’s investment layout
Establishment of a private trust fund: BlackRock established a private trust fund dedicated to Bitcoin risk exposure during the bear market of the cryptocurrency market, which shows the company's recognition of the long-term value of Bitcoin.
Promote Bitcoin spot ETF: BlackRock actively applies for and promotes the launch of Bitcoin spot ETF to allow more investors to access Bitcoin through traditional financial channels.
Diversified investment strategy: In addition to the spot market, BlackRock is also considering allocating Bitcoin futures through its funds to achieve flexible management of Bitcoin risk exposure.
BlackRock believes that Bitcoin is no longer a simple risk asset, but an investment type with unique properties, significant long-term returns, low correlation with traditional assets, and hedging properties. However, it is worth noting that Bitcoin, as an emerging technology, is still in the early stages of widespread use, and its future development is still uncertain. Therefore, investors should fully understand the risks and do adequate risk management when investing in Bitcoin.
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