BlackRock Calls Bitcoin A “Unique Diversifier” For Investors

Updated: 19 September 2024

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Asset management titan BlackRock said that Bitcoin is a “unique” portfolio diversifier for investors against fiscal, monetary and geopolitical risk factors.

“Bitcoin’s nature as a scarce, non-sovereign, decentralized global asset has caused some investors to consider it as a flight to safety option in times of fear and around certain geopolitically disruptive events,” said BlackRock, which has more than $10 trillion in assets under management, in a Sept. 17 report. ”Bitcoin may be seen as an increasingly unique diversifier.”

BlackRock Says Bitcoin Is Fundamentally Detached From Other Asset Classes

BlackRock also said that although the leading crypto is highly-volatile, it is fundamentally detached from other asset classes over the long term. The asset manager added that BTC is the first decentralized alternative to the traditional monetary system to gain widespread adoption.

BlackRock just put out a nine-page white paper that makes case for bitcoin ETF as a "unique diversifier" that can hedge against fiscal, monetary and geopolitical risks, also incl section called "Bitcoin's path to $1 trillion market cap" 👀 Read whole thing here:… pic.twitter.com/mRzDpw4aSP

— Eric Balchunas (@EricBalchunas) September 18, 2024

Bitcoin also “has no traditional counterparty risk, depends on no centralized system, and is not driven by any one country’s fortunes,” according to the report.

The report comes after the asset manager’s CEO Larry Fink changed his stance towards the leading crypto, and said that he had been wrong to dismiss Bitcoin. Since this pivot, the firm has released a series of research papers explaining the potential role Bitcoin could play in investors’ portfolios.

BlackRock is also among several other US asset managers to launch a spot Bitcoin ETF (exchange-traded fund) this year.

IBIT Flows Drop Over The Last 2 Weeks

There have been relatively minimal flows posted by BlackRock’s IBIT over the last fortnight. Data from Farside Investors shows that the fund recorded zero flows for almost every day during this period except Sept. 16 and Sept. 9. On Sept. 16, IBIT registered $15.8 million in net inflows, while it saw $9.1 million leave its reserves on Sept. 9.

Despite the minimal flows, BlackRock’s IBIT maintains a comfortable lead in terms of total inflows since spot Bitcoin ETFs launched in the US in January.

IBIT has seen $20.924 billion enter its fund since the start of the year. Fidelity’s FBTC has posted the second largest net inflows so far with its reserves totaling $9.704 billion.