BlackRock Describes Bitcoin as a ‘Global Monetary Alternative’

The world’s largest asset manager, BlackRock, has shifted its official stance on Bitcoin, now referring to it as a global monetary alternative. This update was shared by Jay Jacobs, the U.S. Head of Thematic and Active ETFs at BlackRock, during a recent digital assets conference.

In his presentation, Jacobs compared Bitcoin to traditional financial assets such as gold and U.S. Treasury bonds. One of the key takeaways was that while the supply of Bitcoin is fixed, the supply of U.S. Treasuries and gold has some level of stability. In contrast, Bitcoin continues to exhibit high volatility, unlike the relatively stable U.S. stock market.

Another important point made was Bitcoin’s relatively short history when compared to the long-established histories of gold and Treasuries. While Bitcoin operates as a decentralized asset, similar to gold’s role in financial reserves, it remains distinct from U.S. currency.

Further analysis in the presentation focused on Bitcoin’s volatility and its correlation with other assets, particularly gold and stocks. Given the low historical correlation between Bitcoin and the stock market, it presents an appealing option for portfolio diversification. Despite its high volatility, this has decreased over time, indicating a maturity in the market.

Jacobs discussed potential scenarios in which small allocations of Bitcoin—ranging from 1% to 5% of an investment portfolio—could impact overall performance. The findings suggested that portfolios incorporating Bitcoin generally yielded improved returns and better risk-adjusted metrics, although higher allocations also resulted in increased risk, visible through sharper drawdowns.

As institutional players like BlackRock integrate Bitcoin into their portfolios, the broader market could evolve, creating a bridge between cryptocurrency and more traditional financial systems.