“Bitcoin is a unique diversifying asset”

Key facts:
  • The firm’s CEO, Larry Fink, had called bitcoin “digital gold.”

  • The report indicates that some investors view BTC as a “safe haven.”

BlackRock, the world’s largest asset manager, highlights that bitcoin (BTC) “is a uniquely diversifying asset,” although it is still in its early stages of adoption as a global means of payment or store of value.

In its latest white paper, BlackRock holds that “BTC’s unique characteristics can make it a hedge against risks that traditional assets cannot address, particularly in times of heightened geopolitical and economic uncertainty.”

The study mentions that The digital currency created by Satoshi Nakamoto has a total supply set at 21 millions, whose emission is reduced every 4 years, an event known as halving. This is a factor that influences its price in the medium and long term.

That inherent scarcity This is what generates institutional interest and interest in small investors.in times of economic uncertainty, high inflation or geopolitical conflicts. In these contexts, investors look for assets that are not directly linked to the political decisions of a government or central entity.

In this way, bitcoin differs from fiat money that It is constantly devalued due to inflation caused by central bank emissionsThe same is true for other cryptocurrencies or tokens that have no restrictions on creating new units. “This has given it a position, unique in the digital asset universe, as a global monetary alternative and an asset with credible scarcity,” they say in the report. They also add:

“As more investors understand and appreciate the ‘digital gold’ nature of bitcoin, it is reasonable to expect that they will continue to use this tool. This may sustain or increase the price in the long term.”

BlackRock report.

As CriptoNoticias reported, Larry Fink, CEO of BlackRock, had also described BTC as “digital gold” and added that it is so international that it will transcend any currency.

In fact, the digital asset has several characteristics that make it similar to gold. as its limited emission and that the creation of new BTC is done through miningwhich requires high energy consumption.

However, one thing the report mentions, BTC has some advantages over gold and, in addition, they have solved several problems of the traditional financial system. For example, It is a decentralized currency and transactions are made almost instantly.economical and without intermediaries.

All transactions made through the Bitcoin network are stored in a public registry, which anyone can access and corroborate each of the movements.

Gold, on the other hand, does not experience large fluctuations in its price in short periods of time, as is the case with BTC and digital currencies.

On this point, the report states that it is for this reason that “bitcoin, considered individually, remains an asset with a high level of risk” and adds: “It has also been volatile and is subject to a multitude of risks, including regulatory challenges, uncertainty about its adoption trajectory and a still immature ecosystem.”

But for BlackRock, the key point is that The risks are unique to BTC and not shared by “other traditional investment assets”. He also highlights:

“From a portfolio perspective, this is why bitcoin, when held in small proportions, can have a diversifying effect on a portfolio.”

BlackRock report.

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