Despite uncertainties, BlackRock projects an upward trajectory for Bitcoin.
As cryptocurrencies like Bitcoin (BTC) continue to gain mainstream prominence, BlackRock (NYSE:BLK), a $10 trillion asset manager and creator of the world's largest Bitcoin exchange-traded fund (ETF), has shared its insights into the future of the premier cryptocurrency.
In a report titled "Bitcoin: A Unique Diversifier", BlackRock outlined Bitcoin's dynamics "in relation to risk, return, and portfolio interactions, acknowledging the early stage of Bitcoin's journey and the rapid evolution of its adoption and understanding among the global investor community".
Bitcoin's $1 Trillion Market Cap Milestone
Specifically, the section pertaining to BTC's $1 trillion market capitalization highlights its "remarkable rise and significant global adoption to date", but also that its "evolving market value reflects (...) uncertainty" regarding its potential to be a "widely held store of value and/or global payment asset".
On the other hand, the asset manager noted that Bitcoin has outperformed all major asset classes in 7 of the last 10 years, leading to a remarkable annualized return of over 100% in the past decade, and emphasized its ability to recover from bear markets:
"The performance has been achieved despite Bitcoin being the worst-performing asset in three of those 10 years, with four drawdowns exceeding 50%. in these historical cycles, it has demonstrated the ability to recover from such drawdowns and reach new highs, despite these prolonged periods of bear market".
As BlackRock's team deduced, such movements in the price of the flagship asset of decentralized finance (DeFi) illustrate, to some extent, its "evolving prospects over time to be adopted on widespread basis as a global monetary alternative".
Simultaneosly, the report references Bitcoin's risk, arguing that while its volatility makes it a "risky asset" on an individual basis, "most of the risk and return drivers that Bitcoin faces are fundamentally different from traditional 'risk off' framework used by some macro commentators".
Finally, BlackRock concluded that Bitcoin's adoption trajectory will likely develop under the influence of concerns about global monetary stability, geopolitical issues, U.S. fiscal stability, and U.S. political stability, describing this as "the inverse of the relationship (...) generally attributed to traditional 'risk assets' relative to such forces".
Bitcoin's Price Analysis
Meanwhile, at press time, Bitcoin was trading hands at $60,080, up 1.91% in the past 24 hours, up 6,22% in the previous 7 days, and up 3.73% in the last month, according to the latest data retrieved on September 18.
It's worth noting that renowed cryptocurrency expert PlanB recently observed that Bitcoin seems to be in the early stages of a bull market but is still waiting for a "trigger to explode upwards" arguing that former U.S. President Donald Trump's victory in the upcoming presidential election could provide this trigger.
All in all, Bitcoin could continue to follow the same bullish path described by the company with $10 trillion in assets under management. However, it's important to remember that cryptocurrency market trends can change without notice, so it's crucial to do your own due diligence when investing.
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