By
Temitope Olatunji
April 29th, 2024
Bitcoin has turned indomitable surging another 5% in 24-hours with BlackRock announcing its entry in BTC. The world’s largest asset manager said that Bitcoin is a potential asset class to put its excess cash to work.
With a day of crossing the $50,000 milestone, Bitcoin (BTC) has surged another 5.5% hitting its new all-time high above $52, 400 levels. The world’s largest cryptocurrency has been on an unprecedented rally since Tesla‘s announcement of $1.5 billion worth of BTC purchase. However, the latest Bitcoin (BTC) price rally comes as the world’s largest asset manager BlackRock announces BTC investment.
Rick Rieder, BlackRock’s chief investment officer of global fixed income, told CNBC on Wednesday, February 17. During an interview with CNBC’s Squawk Box, Rieder said:
“Today the volatility of it is extraordinary, but listen, people are looking for storehouses of value. People are looking for places that could appreciate under the assumption that inflation moves higher and that debts are building, so we’ve started to dabble a bit into it.”
The entry of financial giants like BlackRock certainly puts a lot of weight on more institutional players to participate. Last month in January 2021, BlackRock added BTC Futures as potential investment for two of its funds. This included the BlackRock Global Allocation Fund and the BlackRock Strategic Income Opportunities Fund.
The BTC price has already jumped 70% year-to-date and entering at such a stage means the big players are looking at solid potential ahead. Commenting on the regulatory developments taking in the space, Rieder said:
“My sense is the technology has evolved and the regulation has evolved to the point where a number of people find it should be part of the portfolio, so that’s what’s driving the price up”.
BlackRock and Its BTC Move: Putting Extra Cash At Work
In the interview further, Rieder added that BlackRock is holding a lot more cash than ever before in its history. With inflation ahead along with solid currency devaluation, sitting on a hoard of cash just doesn’t make sense. Rieder said:
“It’s because duration doesn’t work, interest rates don’t work as a hedge and so diversifying into other assets makes some sense. Holding some portion of what you hold in cash in things like crypto seems to make some sense to me, but I wouldn’t espouse a certain allocation or target holding.”
When asked how much one should allocate to Bitcoin, Rieder added that it “depends on what the rest of your portfolio looks like”.
With the recent BTC price, the world’s largest cryptocurrency seems indomitable at this point. Popular market analyst Peter Brandt added that Bitcoin has entered a third parabolic advance over the last decade. This happened with Bitcoin surging past $50,000 levels on Wednesday, February 17. The graph shows that Bitcoin can surge all the way to $240,000 from here.
Big picture $BTC
Bitcoin is undergoing its third parabolic advance in the past decade. A parabolic advance on an arithmetic scale is extremely rare – three on a log scale is historic pic.twitter.com/fyyM5Ws6N5— Peter Brandt (@PeterLBrandt) February 16, 2021
As Bitcoin crossed $50K levels, the institutional interest in BTC has also surged to new highs. On Tuesday, February 16, the CME Bitcoin Futures trading volume skyrocketed to a record $5 billion. SkyBridge Capital founder Anthony Scaramucci expects the BTC price to hit $100K before 2021-end.