Bitcoin Report From BlackRock As Of 9/16.Now the game is over

Bitcoin Report From BlackRock As Of 9/16.
Now the game is over. The report itself is thought to be a sign that the falconry has ended on BlackRock.

The content is poor compared to Fidelity, but the meaning at this point is huge, so I post it by professional translation.

Bitcoin: A Unique Diversifier
Why bitcoin’s appeal to investors lies in its detachment from traditional risk and return drivers

-BlackRock

preface
Bitcoin has gone through a historic journey during its 15-year existence. Starting from obscurity, it has become an asset that more and more individuals and institutions around the world hold to varying degrees. BlackRock’s first Bitcoin-related customer product was launched in 2022, but the years before that have been an important period of research, monitoring, and customer engagement for us.

As a trustee, we want to provide accessibility and options to meet the individual needs of our customers. Like other asset groups, we strive to provide more investment options when our customers express the need for access. However, providing customers with options is only the first step: We need to closely examine our performance and conduct our own research to educate our customers.

For Bitcoin, we want to apply the same cautious approach when our clients seek our insights into this very unique and relatively new asset. We believe that Bitcoin, due to its global, decentralized, fixed supply, and nature as a non-state asset, has distinct risk and revenue drivers from traditional asset families, and is fundamentally uncorrelated in the long run. We maintain this belief, even if short-term market trading behavior sometimes (in some cases markedly) differs from what Bitcoin’s underlying nature suggests.

We observed this most recently, on August 5, 2024. At the time, Bitcoin was down 7% in one day, along with a 3% drop in the S&P 500 as global markets experienced a sharp drop related to the liquidation of the Japanese yen carry trade. The episode overlapped with a series of long-delayed Bitcoin-specific cases involving bankruptcy dividends and liquidations (Genesis, Mt. Gox) that were already unfolding over the previous three days. And this was exacerbated by the competition for liquidity from the ongoing global market sell-off at the time.

In a pattern common during these intermittent episodes of short-term, sharp negative alignment with stocks, Bitcoin prices rebounded to regain their pre-sale levels in three days. We see this pattern as an example of how fundamentals eventually prevail over short-term leveraged trading reactions. As Warren Buffett put it, “stock markets are devices that transfer money from impatient people to patient people.” This wisdom has largely been true in the history of the Bitcoin market as well.

We present in the enclosed materials our best attempts to capture the dynamics of Bitcoin related to risk, revenue, and portfolio interactions today, in response to the great interest of our customers. We do this while recognizing that Bitcoin is in the early stages of its journey, and its adoption and understanding by the global investor community is evolving quickly.

Bitcoin fell 5% after Genesis announced a $1.1 billion BTC dividend to creditors on Aug. 2, 2024. On Aug. 3 and 4, 2024, Bitcoin fell a total of 5% as the big market maker began forced liquidation of its BTC and ETH holdings. Bitcoin was down another 7% on Aug. 5, the day the stock market underwent a sharp correction. (Source: Bloomberg Bitcoin Spot Price, as of Aug. 2024.)

Bitcoin recovered its August 5 loss by Aug. 8, 2024, and its level at the beginning of the month by Aug. 25. The S&P 500 recovered its August 5 loss by Aug. 13, 2024. Source: Bloomberg Bitcoin Spot Price, as of Aug. 2024. Past performance does not guarantee future results.

Authors Samara Cohen, Chief Investment Officer, BlackRock ETF and Index Investment Sector
Robert Mitchnick, Director, Digital Assets Division, BlackRock
Russell Brownback, Head of Global Macro Positioning, BlackRock Bond Sector

introduction
Is Bitcoin a “risk asset” or a “safe asset”? This is one of the most frequently asked questions when customers consider investing in Bitcoin for the first time. In our view, Bitcoin’s unique nature makes it unsuitable for these traditional financial frameworks and most other frameworks, and its long-term revenue drivers are fundamentally not correlated with other portfolio sources.
Although Bitcoin was volatile and had a short-term alignment with stocks (especially at a time of sharp changes in U.S. dollar real interest rates or liquidity), its long-term average correlation with stocks and bonds was lower and its long-term historical yields were much higher than all major asset groups.
In the long run, we believe Bitcoin’s drivers of adoption are distinct from the global macro-factors that drive most traditional financial assets, and in some cases the opposite is likely. In this report, we want to explain these dynamics.

a key point
Investors considering investing in 01 Bitcoin are considering how to analyze it compared to traditional financial assets, given its unique characteristics and limited history.
02 Bitcoin is clearly a “dangerous” asset on its own due to its high volatility. However, since most of the risks and potential revenue drivers facing Bitcoin are fundamentally different from traditional “risk” assets, they are not suitable for most traditional financial frameworks, including the “risk asset” vs. “safe asset” framework used by some macro critics.
03 Due to the nature of Bitcoin as a scarce, non-national, decentralized global asset, some investors are experiencing a period of fear and