BlackRock Chose Bitcoin Over Traditional Assets. What is the Reason?
BlackRock provided reasons for the rise of Bitcoin, calling it an attractive asset.
BlackRock gave the reasons for the rise of Bitcoin, calling it an attractive asset.
Why analysts at the largest asset management firm consider Bitcoin a more attractive asset than traditional assets
BlackRock called Bitcoin more attractive to investors than traditional assets, also citing additional factors for the growth of the leading cryptocurrency.
On the website of BlackRock-owned iShares, which manages dozens of ETF (Exchange-Traded Funds), an analytical review of trends for 2025 has been published. The material analyses the impact of geopolitics, economics and artificial intelligence on various markets, including cryptocurrencies.
BlackRock is the world's largest asset management company. Its products include a Bitcoin-based exchange-traded fund (ETF), the iShares Bitcoin Trust ETF, which manages nearly $44 billion as of 20 November 2024. CEO Larry Fink has called Bitcoin 'digital gold' and admitted that he was wrong to be sceptical about Bitcoin for five years, but has delved deeper into the subject, now becoming a staunch supporter.
The company's analysts call Bitcoin a new asset with 'unique demand drivers' due to its characteristics as an alternative monetary instrument and its limited supply. Such an asset is 'digital, global, and independent of specific states and their existing economic and monetary systems.'
Despite its volatility, Bitcoin's long-term fundamentals differ significantly from those that define stocks and other 'risky assets.' Some of these characteristics, considered a risk factor for traditional assets, may even have an opposite meaning, the report states.
BlackRock Prefers Bitcoin to Traditional Assets
BlackRock's emphasis on Bitcoin reflects the growing recognition of the resilience and unique characteristics of the digital currency. Unlike traditional assets such as bonds and stocks, Bitcoin operates on a decentralised network, offering transparency and security that appeal to both retail and institutional investors. Its scarcity, limited to 21 million coins, further enhances its appeal as a store of value, similar to digital gold.
BlackRock analysts have pointed to a 'strong inverse correlation with real interest rates.' According to them, this correlation could be a further catalyst for the growth of the leading cryptocurrency, thanks to a possible decrease in US credit rates in the future. In addition, a reduction in real interest rates due to lower nominal rates or a sharp rise in inflation could act as a further boost.
A sharp rise in interest rates in 2022 was one of the factors that contributed to a 67% correction in Bitcoin, according to analysts at BlackRock. Now, with the Fed cutting rates, investors may see Bitcoin as an increasingly attractive asset compared to others, the analysts write:
'In addition to the macroeconomic situation, there is renewed optimism after the US election, which could lead to greater clarity in the regulation of Bitcoin and digital assets in general. Donald Trump has proposed a strategic reserve of Bitcoin, and pro-cryptocurrency politicians have scored electoral successes. 'The macroeconomic situation, combined with a conducive political environment, could help accelerate and expand Bitcoin's spread,'
the report states.
Conclusion
Bitcoin's ability to outperform traditional markets during economic turmoil positions it as a compelling alternative for wealth preservation.
BlackRock's focus on Bitcoin not only reinforces its legitimacy, but also highlights a broader trend of institutional adoption, marking a transformative era for digital finance.
With nearly $4.6 billion in options contracts on Bitcoin (BTC) and Ethereum (ETH) expiring, the cryptocurrency market is bracing for increased volatility.
BlackRock gave the reasons for the rise of Bitcoin, calling it an attractive asset.
Why analysts at the largest asset management firm consider Bitcoin a more attractive asset than traditional assets
BlackRock called Bitcoin more attractive to investors than traditional assets, also citing additional factors for the growth of the leading cryptocurrency.
On the website of BlackRock-owned iShares, which manages dozens of ETF (Exchange-Traded Funds), an analytical review of trends for 2025 has been published. The material analyses the impact of geopolitics, economics and artificial intelligence on various markets, including cryptocurrencies.
BlackRock is the world's largest asset management company. Its products include a Bitcoin-based exchange-traded fund (ETF), the iShares Bitcoin Trust ETF, which manages nearly $44 billion as of 20 November 2024. CEO Larry Fink has called Bitcoin 'digital gold' and admitted that he was wrong to be sceptical about Bitcoin for five years, but has delved deeper into the subject, now becoming a staunch supporter.
The company's analysts call Bitcoin a new asset with 'unique demand drivers' due to its characteristics as an alternative monetary instrument and its limited supply. Such an asset is 'digital, global, and independent of specific states and their existing economic and monetary systems.'
Despite its volatility, Bitcoin's long-term fundamentals differ significantly from those that define stocks and other 'risky assets.' Some of these characteristics, considered a risk factor for traditional assets, may even have an opposite meaning, the report states.
BlackRock Prefers Bitcoin to Traditional Assets
BlackRock's emphasis on Bitcoin reflects the growing recognition of the resilience and unique characteristics of the digital currency. Unlike traditional assets such as bonds and stocks, Bitcoin operates on a decentralised network, offering transparency and security that appeal to both retail and institutional investors. Its scarcity, limited to 21 million coins, further enhances its appeal as a store of value, similar to digital gold.
BlackRock analysts have pointed to a 'strong inverse correlation with real interest rates.' According to them, this correlation could be a further catalyst for the growth of the leading cryptocurrency, thanks to a possible decrease in US credit rates in the future. In addition, a reduction in real interest rates due to lower nominal rates or a sharp rise in inflation could act as a further boost.
A sharp rise in interest rates in 2022 was one of the factors that contributed to a 67% correction in Bitcoin, according to analysts at BlackRock. Now, with the Fed cutting rates, investors may see Bitcoin as an increasingly attractive asset compared to others, the analysts write:
the report states.
Conclusion
Bitcoin's ability to outperform traditional markets during economic turmoil positions it as a compelling alternative for wealth preservation.
BlackRock's focus on Bitcoin not only reinforces its legitimacy, but also highlights a broader trend of institutional adoption, marking a transformative era for digital finance.
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