BlackRock's iShares Bitcoin Trust (IBIT) saw modest inflows amounting to $6.76 million in September, despite a nearly 5% increase in Bitcoin prices. The performance of other Bitcoin ETFs was worse, with collective outflows of $155 million.
Even though IBIT managed to record an inflow of $15.82 million on a single day, earlier outflows of $9.06 million brought the net inflow to a modest level. On ten days, IBIT had zero net flow.
BlackRock's report, "Bitcoin: A Unique Diversifier," outlines Bitcoin's potential as a diversification tool. The report emphasizes Bitcoin's attributes, such as scarcity and decentralization, that make it an appealing hedge against traditional financial uncertainties.
BlackRock's analysis suggests that Bitcoin outperformed major asset classes in seven out of the last ten years, achieving over 100% annual returns over the last decade. Despite its volatile nature, Bitcoin has shown resilience and capacity for recovery.
The asset manager also discusses Bitcoin’s utility as a safe haven during global crises, highlighting its non-sovereign and decentralized nature. These features protect it from geopolitical and economic disruptions affecting conventional assets.
The discussion extends to Bitcoin's potential impact on US fiscal policies. Institutional interest in Bitcoin as an alternative reserve asset is growing, driven by concerns over US federal deficits and global debt accumulation.
Despite its promising aspects, BlackRock advises cautious incorporation of Bitcoin into portfolios due to its volatility and regulatory uncertainties.
