BlackRock Calls Bitcoin ‘Unique Diversifier’ in Research Paper

Less than a year after spearheading spot Bitcoin ETFs, BlackRock, the largest investment firm in the world with $9 trillion in assets under management (AUM), has published a Bitcoin “whitepaper” breaking down the asset for potential investors.

The piece is titled “Bitcoin: A Unique Diversifier”, and is co-written by Samara Cohen, BlackRock’s ETF and Index Chief Investment Officer (CIO), BlackRock’s Head of Digital Assets, Robert Mitchnick, and Russel Brownback, the Head of Global Macro Positioning for Fixed Income. The paper serves as BlackRock’s “best attempt” to compose a summary of the asset “in recognition of the early stage bitcoin is at in its journey.”

BlackRock draws attention to Bitcoin’s long-term performance and its low historical correlation to U.S. equities, outside of dislocation periods that tend to be seen around “episodes of sudden shifts in U.S. dollar real interest rates or liquidity.”

The publication touts Bitcoin’s unique properties such as decentralization, lack of traditional counterparty risk, and non-sovereign nature as primary drivers of the asset's detachment from macro risk factors such as “banking system crises, sovereign debt crises, currency debasement, and geopolitical disruption.”

This reiterates Larry Fink and BlackRock’s view of Bitcoin as a potential “flight to safety” asset, backed up by BTC’s 10-day and 60-day performance compared to gold and the S&P 500 during major geopolitical events, such as last year’s U.S. banking crisis, the Iran conflict, and COVID.

BTC is up over 130% since BlackRock filed for its spot Bitcoin ETF in June 2023, compared to the S&P 500 which is up 33% in the same amount of time.