Bitcoin rallied nearly 6% after the world’s largest asset manager issued a white paper highlighting the digital asset’s potential as a hedge against monetary and geopolitical risks.
BlackRock published a Bitcoin (BTC) white paper on its appeal to investors as a “unique diversifier” that is detached from traditional fiscal and geopolitical risks.
The Bitcoin price bottomed out shortly before senior Bloomberg ETF analyst Eric Balchunas shared the nine-page white paper in a Sept. 18 X post.
Bitcoin: A Unique Diversifier, BlackRock. Source: Eric Balchunas
Balchunas shared BlackRock’s report at 4:21 pm UTC, nearly an hour after Bitcoin started rallying from its daily bottom of $59,354.
Cointelegraph data shows that Bitcoin has since rallied over 5.7% to briefly reclaim $62,600 for the first time in over three weeks.
BTC/USD, bottom, 1-day chart. Source: Cointelegraph
Some analysts are predicting a three-month Bitcoin rally up to $92,000, which could start in October, based on historical chart patterns and Bitcoin’s average monthly returns for the fourth quarter of the year.
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Bitcoin can hedge against monetary and geopolitical risks: BlackRock
BlackRock’s white paper notes that Bitcoin’s decentralized, permissionless nature made it the world’s first “truly open-access monetary system,” not just a cryptocurrency.
What makes Bitcoin relevant? Source: BlackRock
The asset manager also praised Bitcoin for having “no traditional counterparty risk,” or dependencies on centralized systems. The white paper states:
“These properties make it an asset that is largely detached (on fundamentals) from certain critical macro risk factors, including banking system crises, sovereign debt crises, currency debasement, geopolitical disruption, and other country-specific political and economic risks.”
To highlight Bitcoin’s resilience, the asset management giant shared a chart that shows how Bitcoin returns surpassed the S&P 500 and gold prices during past major geopolitical events.
Bitcoin, S&P 500, gold, through geopolitical crises. Source: BlackRock
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Bitcoin adoption will be driven by global monetary and geopolitical concerns
Bitcoin’s adoption path will be driven by the degree of macroeconomic concerns, according to BlackRock’s white paper.
“Over the long term, Bitcoin’s adoption trajectory is likely to be driven by the degree to which concerns rise and fall over global monetary instability, geopolitical disharmony, US fiscal sustainability and US political stability.”
Bitcoin long-term performance. Source: BlackRock
BlackRock is the issuer of the world’s largest Bitcoin exchange-traded fund (ETF), which holds over $21.4 billion worth of BTC and commands over 38% of the Bitcoin ETF market, according to Dune data.
ETF issuers overview. Source: Dune