BlackRock: BTC a Hedge Against Monetary Risk and Geopolitical Uncertainty

Konskie, Poland - January 07, 2024: BlackRock company logo displayed on mobile phone screen
  • Senior managers at BlackRock are optimistic about their IBIT fund’s early success post-launch.
  • They have identified access as a key advantage of these funds and view Bitcoin as a volatile, nascent asset that serves as a hedge against risks.
  • Meanwhile, interest in crypto funds is increasing, though amid delays for the Ether funds it’s unclear when other funds may become a reality.

“Access has been the real game changer with ETFs”, that’s the conclusion of Samara Cohen, the Chief Investment Officer of ETF and Index Investments at BlackRock.

In a video discussing the first few months post-launch of the asset managers’ IBIT fund, she and Jay Jacobs, US Head of Thematic and Active ETFs, seem enthusiastic about the success so far.

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Jacobs said in the short clip that “Bitcoin is a hedge against geopolitical uncertainty and monetary risk”.


Nascent Asset with High Volatility

Jacobs describes Bitcoin as a nascent asset with high volatility and unique behaviours compared to traditional stocks and bonds.

Bitcoin is a nascent asset. It’s only one-tenth of the size of the gold market. 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.

Jay Jacobs, BlackRock US Head of Thematic and Active ETFs

He adds that BTC is viewed by investors as a hedge against risks or a bet on blockchain adoption, requiring a careful balance of risks and potential returns.

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.

Jay Jacobs, BlackRock US Head of Thematic and Active ETFs

Some community observers pointed out that BlackRock’s statements may not be for the love of Bitcoin only, but could serve a self-interest – to sell IBIT.

Interest in Crypto Funds Increasing

As true as that may be, any support for Bitcoin is also support for the industry, no matter what the intention. Recently, interest in spot crypto funds has increased, with Ethereum funds and Solana funds expected to come next.

Not long ago people close to the matter had speculated that Cardano and XRP may also get a fund in the United States soon. However, that may still be some time away.

Related: Crypto ETF Landscape Heats Up: Australian Bitcoin ETF Buys the Dip, 21Shares Pursues US Solana Listing

First, the US Ether funds have just been delayed until mid-July at least, as the US Securities and Exchange Commission (SEC) just responded to applicants giving them until July 8 to re-submit S-1 forms for trading.

Observers also think a Spot Solana ETF is unlikely if there is no change in Washington’s stance on crypto and if Biden remains president after the November election – making a Cardano or XRP ETF even less likely.

Aaron Feuerstein

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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