Bitcoin Hits New Record High, BlackRock Recognizes Its Potential
Bitcoin, the world's leading cryptocurrency, has hit a new record high, with its price surging past $124,688 and market capitalisation exceeding $2.47 trillion. Investment giant BlackRock has recognised bitcoin's unique potential as a 'diversifier', citing its low correlation with stocks and independence from traditional macroeconomic factors.
BlackRock's analysis, conducted by its own team, highlights bitcoin's distinct characteristics. Unlike traditional currencies, bitcoin is not a legal tender and is unlikely to become one. However, it has demonstrated remarkable resilience, rising during six major global crises since 2020. Its price performance suggests it may be gaining a status similar to that of gold, a widely recognised store of value with a total worth of $26 trillion.
Historically, governments have shown power over currencies, as seen during the Great Depression when the U.S. government confiscated gold. However, banning bitcoin today might be politically easier due to its lower ownership percentage compared to gold or bank accounts. Bitcoin does not compete with paper money but rather serves as insurance against it.
Bitcoin's latest price surge and BlackRock's recognition underscore its growing significance in the global financial landscape. Despite governments' historical control over currencies, bitcoin's decentralised nature and rising status as a digital alternative to gold pose intriguing challenges and opportunities.
