BlackRock Calls Bitcoin A “Unique Diversifier” For Investors

The asset management giant BlackRock has stated that Bitcoin serves as a “distinctive” diversification tool for investors aiming to mitigate fiscal, monetary, and geopolitical risks.

“The inherent qualities of Bitcoin, such as its scarcity, non-sovereign nature, and decentralized status, have led many investors to view it as a safe haven during times of uncertainty and amid disruptive geopolitical events,” remarked BlackRock, which manages over $10 trillion in assets, in a report dated September 17. “Bitcoin might increasingly be regarded as a unique means of diversification.”

BlackRock Claims Bitcoin Is Fundamentally Independent of Other Asset Categories

BlackRock further noted that although Bitcoin is characterized by significant volatility, it remains fundamentally separate from other asset categories in the long run. The asset manager highlighted that BTC represents the first decentralized alternative to the conventional financial system to achieve widespread acceptance.

BlackRock just released a nine-page white paper making the case for a bitcoin ETF as a “unique diversifier” that can hedge against fiscal, monetary, and geopolitical risks. It even includes a section titled “Bitcoin’s path to a $1 trillion market cap” 👀 Read the whole thing here:… pic.twitter.com/mRzDpw4aSP

— Eric Balchunas (@EricBalchunas) September 18, 2024

The report states that Bitcoin does not carry traditional counterparty risk, is not reliant on any centralized system, and is unaffected by the economic conditions of any particular nation.

This report follows a shift in perspective from BlackRock’s CEO Larry Fink, who now acknowledges that he was incorrect in his previous dismissal of Bitcoin. Following this shift, the firm has published a series of research documents discussing Bitcoin’s potential role in investor portfolios.

Additionally, BlackRock is one of several U.S.-based asset managers to introduce a spot Bitcoin ETF (exchange-traded fund) this year.

IBIT Flows Decline in the Past Two Weeks

Recently, BlackRock’s IBIT has experienced minimal flow activity. According to data from Farside Investors, the fund showed no flows on nearly every day during this timeframe, except on September 16 and September 9. On September 16, IBIT recorded $15.8 million in net inflows, while on September 9, it saw $9.1 million in outflows.

Despite the low flow activity, BlackRock’s IBIT continues to hold a significant lead in total inflows since the inception of spot Bitcoin ETFs in the U.S. in January.

IBIT has secured $20.924 billion in inflows since the beginning of the year. In comparison, Fidelity’s FBTC has recorded the second highest net inflows so far, accumulating $9.704 billion.

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