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BlackRock does not rule out that there may be high volatility in the short term.
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In the medium and long term, the investment company maintains high expectations for Bitcoin.
The world’s largest investment fund manager, BlackRock, continues to be optimistic about bitcoin (BTC).
In a report Posted today, November 19, the company that manages the iShares Bitcoin Trust (the world’s largest bitcoin ETF) described bitcoin as ““an emerging asset with unique demand drivers that stem from its properties”.
These demand drivers, according to BlackRock, are: 1) being an alternative monetary asset; 2) have a finite supply; 3) be digitally native; 4) have a global presence; and 5) be decoupled from governments and their existing economic and monetary systems.
BlackRock adds that “bitcoin remains a volatile asset in general,” but despite that They remain bullish in the long term.
“We believe the long-term fundamentals of bitcoin are largely distinct from the traditional macroeconomic indicators that drive stocks and other ‘risk assets’ and, in certain cases, the risk factors may even be inverted.”
Blackrock, asset management company.
In the most immediate term, BlackRock explains that macroeconomic conditions can impact its price. Mention, as an example, the changes in the interest rates real (nominal interest rates minus inflation) in the United States.
BlackRock says that these cuts “tend to impact non-interest-paying assets, such as bitcoin and gold, as they change the opportunity cost of these assets compared to income-paying investments, such as bonds.”
They add that “now, amid rate cuts, real interest rates could fall. “This could make investors see bitcoin as increasingly attractive relative to other assets.”
Inverse correlation between bitcoin and real interest rates. Source: BlackRock.
Political issues also have an impact on the price of BTC, explains BlackRock:
“In addition to the macroeconomic environment, there is renewed optimism that greater regulatory clarity for bitcoin and digital assets in general may emerge after the US elections. President-elect Donald Trump campaigned on maintaining a strategic reserve of bitcoin, while pro-Cryptocurrency politicians in House and Senate races from both parties enjoyed electoral success. “The macroeconomic environment combined with supportive policies could accelerate and expand bitcoin adoption.”
BlackRock, asset management company.
As this note on BlackRock’s bullish expectations is published, bitcoin price mark new all-time highsapproaching $94,000.
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