News - BlackRock explains: This is what makes Bitcoin unique

By Ted Maas

BlackRock explains: This is what makes Bitcoin unique

When BlackRock speaks, the financial world listens. Now the asset manager explains what sets Bitcoin apart from all other investments.

There are three reasons why Bitcoin is indispensable in our world today: First, the cryptocurrency is scarce with its limit of 21 million coins, second, its digital nature allows for global transactions in real time, and third, it is a monetary network that is open to everyone-a historic breakthrough.

From a new report from BlackRock turns out they are Bitcoin fans, too. The world's largest asset manager is quite enthusiastic. According to the three authors, BTC solves problems that have long existed with traditional forms of money. Moreover, especially in times of crisis, Bitcoin is increasingly seen as a "safe haven."

They explain that Bitcoin is the first decentralized, non-state form of money that is gaining traction worldwide. What is special about Bitcoin is that it operates without the risks associated with traditional financial institutions. It is also not dependent on a centralized system or a single country's economy.

"These characteristics make Bitcoin an asset that is largely immune to major macroeconomic risks, such as banking crises, sovereign debt, currency devaluation, geopolitical tensions and other political and economic risks on a country-by-country basis," the report said.

Despite a weak September, BlackRock continues to dominate in the Bitcoin ETF market. Although the iShares Bitcoin Trust saw only small net inflows this month, other funds cannot match BlackRock's BTC index fund. The company now manages 357,548 BTC, worth $22.52 billion, and benefits from an annual management fee of 0.25 percent.

What is striking is how the statements of BlackRock experts now closely resemble what was seen as "crazy" by Bitcoin enthusiasts just a few years ago. To emphasize Bitcoin's strength, a chart shows how Bitcoin returns far outperformed the S&P 500 and gold after geopolitical crises.

"Bitcoin's future acceptance likely depends on how concerned people become about monetary instability, geopolitical turmoil and U.S. financial and political stability," the authors conclude.

Key advice for investors: "Bitcoin can serve as a unique way to spread risk in your portfolio against various financial, monetary and geopolitical risks." Or simply put: Buy Bitcoin, even if just a little, for diversification.

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