Bitcoin rose about 6% after the world's largest asset manager published a white paper highlighting the digital asset's potential as a hedge against currency and geopolitical risks.
BlackRock has published a white paper on Bitcoin (BTC), which it says is attractive to investors as a “uniquely diversified vehicle” that is insulated from traditional financial and geopolitical risks.
Bitcoin prices hit bottom just before Bloomberg ETFs senior analyst Eric Balchunas shared the nine-page white paper in a Sept. 18 X post.
Bitcoin: A Unique Diversification Vehicle, BlackRock. Source: Eric Balchunas
Balchunas shared the BlackRock report at 4:21 p.m. (UTC), nearly an hour after Bitcoin began its climb from the day's low of $59,354.
Bitcoin has since risen more than 5.7%, briefly recovering above $62,600 for the first time in three weeks, according to Cointelegraph data.
BTC/USD, bottom, 1-day chart. Source: Cointelegraph
Based on historical chart patterns and Bitcoin’s average monthly gains in the fourth quarter of this year, some analysts are predicting a three-month rise to $92,000 for Bitcoin, which could begin in October.
Related: Crypto Billionaire Loses $43 Million in Ethereum and Bitcoin Trading
Bitcoin can hedge financial and geopolitical risks: BlackRock
BlackRock's white paper notes that Bitcoin's decentralized and permissionless nature makes it the world's first “truly open-access monetary system,” rather than simply a cryptocurrency.
Why is Bitcoin important? Source: BlackRock
The asset manager also cited Bitcoin’s lack of “traditional counterparty risk” and its lack of reliance on centralized systems. The white paper states:
“These characteristics make gold an asset that is largely (fundamentally) insulated from certain important macro risk factors, such as banking system crises, sovereign debt crises, currency depreciation, geopolitical turmoil and other country-specific political and economic risks.”
To highlight Bitcoin's resilience, the asset management giant shared a chart showing how Bitcoin's returns have outperformed the S&P 500 and gold prices during past major geopolitical events.
Bitcoin, S&P 500, and gold weather the geopolitical crisis. Source: BlackRock
Related: Vitalik Buterin Sings at Token2049, Highlighting Low L2 Fees as Milestone for ETH
Bitcoin adoption will be driven by global currencies and geopolitical concerns
According to the BlackRock whitepaper, the path of Bitcoin adoption will depend on the level of macroeconomic concerns.
“Longer term, Bitcoin's adoption trajectory will likely be driven by rising or falling levels of concern about global monetary instability, geopolitical disharmony, U.S. fiscal sustainability, and U.S. political stability.”
Bitcoin's long-term performance. Source: BlackRock
BlackRock is the world's largest issuer of a Bitcoin exchange-traded fund (ETF), holding $21.4 billion worth of BTC and accounting for over 38% of the Bitcoin ETF market. According to To Dune data.
Summary of ETF issuers. Source: Dune
magazine: Bitcoin ETF may face threat from hackers, Ellison not seeking prison time, and more: Hodler's Digest, September 8-14
