Faced with growing uncertainty over US debt, BlackRock is touting Bitcoin as a safe haven asset. According to a recent report from the world's leading asset manager, Bitcoin could represent a diversification solution in the event of a debt crisis and the instabilities that would result from it.
Using Bitcoin Against Systemic Risks Is a Possibility for BlackRock
The topic of buying Bitcoin as a hedge against a crisis or even a default on US debt is gaining popularity. What was once an idea promoted by the most optimistic Bitcoiners is now being picked up by mainstream media, major corporations, and even some political figures.
For example, in July 2024, former President and presidential candidate Donald Trump promised that if re-elected, he would incorporate BTC seized by the government into the state's strategic reserves.
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Additionally, Wyoming Senator Cynthia Lummis recently proposed a new bill, the “Bitcoin Act,” to acquire 1,000,000 BTC over 5 years to build a reserve to help the United States government pay off its debt, which now stands at nearly $35.4 trillion.
BlackRock also published a study titled “Bitcoin, a Unique Diversifier,” in which it promotes BTC as a hedge asset against the debt crisis.The paper presents Bitcoin as an asset distinct from traditional financial instruments, with low long-term correlation to stocks and bonds.
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The study presents Bitcoin as a potential means of diversification against fiscal, monetary and geopolitical risks.particularly related to the growing US debt, uncertainty surrounding the Federal Reserve's monetary policy, and global instability.
BlackRock's chief investment officer for ETFs was quoted as saying:
“Growing concerns in the United States and abroad about the state of U.S. federal deficits and debt have increased the appeal of potential alternative reserve assets as a hedge against possible future events affecting the dollar.”
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The study concludes in particular that, contrary to what some investors claim, Bitcoin's fundamental characteristics differ from those of other risk assetsShe specifies:
“While Bitcoin has shown instances of short-term moves that correlate with stocks and other “risk assets,” its long-term fundamental drivers are very different, and in many cases inverse, to most traditional investment assets.”
As the title of the study highlights, for a growing number of investors, Bitcoin is increasingly seen as a “unique diversification” asset, or even as a refuge from the failings of the traditional financial system..
Bloomberg ETF analyst Eric Balchunas even said in a post on X that, thanks to his qualities, Bitcoin is often referred to as the “2nd Amendment of money”.
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Sources: BlackRock, Forbes
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First lured by the lure of gain, I am now trapped deep into the rabbit hole. With no way out, I have no choice but to share my knowledge and transmit the passion I have for Bitcoin. I am also the creator of Adopt a Block, an educational site dedicated to Bitcoin.
Marius Farashi Tasooji
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