Head of Thematic and Active ETFs at BlackRock Jay Jacobs says that Bitcoin is a hedge against geopolitical uncertainty and monetary risk. Speaking on the first edition of BlackRock’s Quick Download series, Jacobs said that the digital assets industry is blowing up, and investors are loving its IBIT ETF since launch.
“Bitcoin is a nascent asset. It’s only one-tenth of the size of the gold market,” Jacobs says in the video. “Therefore, it has high volatility and behaves a bit differently than stocks and bonds. A lot of investors look at it as a potential hedge against geopolitical and monetary risks. Other investors look at it as a way to play future adoption of blockchain technology. In either case, investors must take a measured approach to Bitcoin, considering both the risks and the potential returns of the asset.”
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Despite Market Downturn, BlackRock’s Bitcoin ETFs still dominate the charts
Since the launch of Spot Bitcoin ETFs in January 2024, Bitcoin has exploded in price to new all-time highs. In March, the leading digital currency reached its ATH of 73,000. BlackRock’s Bitcoin ETF has been the most profitable, with Grayscale sitting close behind in terms of inflow. BlackRock’s IBIT surpassed Grayscale’s Bitcoin ETF in the last week of May. The flip was notable in that Grayscale had converted its Bitcoin trust that had been on the OTC market since 2015.
Now at the midpoint of the year, crypto-based ETFs have dominated the conversation within the finance sector. Bitcoin had seen its offering approved in January, with Ethereum following that with an approval last month. Although the latter has yet to go live, BTC has proven immensely valuable.
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BlackRock’s promotion of Bitcoin and its IBIT ETF comes at an interesting time though, as the inflow of all Spot Bitcoin ETFs has begun to slow. The decrease in inflows marks a shift away from the initial hype around ETFs. As the demand for Bitcoin slows, the price of the asset has also shrunk back down to the low $61,000 threshold. Furthermore, BlackRock and other asset management firms have also thrown their ETF hats into Ethereum, with those assets expecting approval as soon as next week.
Many investors view Bitcoin and digital assets as the future of everyday finance, thus the interest in these ETFs. BlackRock believes that this interest in the cryptocurrency sector will only grow, especially as new alternatives for the dollar and investing become more popular.