My three key interpretations
The global asset management giant has made it clear: Bitcoin is no longer an 'alternative asset,' but a formal member of the modern portfolio.
Yesterday, a friend from the investment circle asked me: 'Has BlackRock really listed Bitcoin as a core investment for 2025?' I smiled knowingly at the message he sent. Indeed, the world's largest asset management company, BlackRock, has recently sent out a significant signal at the New York summit.
But more accurately, BlackRock positions Bitcoin alongside U.S. Treasury bonds and the 'Seven Tech Giants' stocks as the three pillars of a modern portfolio, rather than simply declaring it as an 'investment mainstream.'
As an analyst who has been navigating the crypto space for many years, I must say that this moment has come faster than I imagined. Just imagine, a giant managing $12.5 trillion in assets officially recognizes Bitcoin's value storage status; it is as shocking as if Greenspan suddenly became a fan of Satoshi Nakamoto.
01 BlackRock's true stance: from skepticism to embrace, but not blindly.
BlackRock's shift in attitude towards Bitcoin is indeed remarkable, but we need to accurately understand their position.
BlackRock does not simply label Bitcoin as the 'strongest investment theme of 2025,' but elevates it to the level of strategic asset allocation. In their framework, Bitcoin is now on par with U.S. Treasury bonds and tech stocks, becoming one of the three pillars of a diversified portfolio.
What is the logic behind this transformation? BlackRock sees the low correlation of Bitcoin with traditional asset classes. In the context of disruptive trends such as the rise of artificial intelligence, geopolitical fragmentation, energy transition, and aging populations reshaping the global economy, traditional investment strategies are no longer sufficient.
My personal observation is that BlackRock's move is actually a hedging strategy against the depreciation of fiat currency. As global central banks continue to inject liquidity, finding non-correlated value storage tools becomes increasingly important.
02 The institutionalization process of Bitcoin: a difficult journey from the margins to the mainstream.
The institutionalization of Bitcoin is not an overnight process. Looking back at 2020-2021, the emerging 'digital gold theory' was just beginning to gain mainstream attention. At that time, the total supply limit of Bitcoin was set at 21 million coins, sharing similar properties with the limited supply of gold.
Currently, the total market capitalization of Bitcoin has surpassed $2 trillion, becoming the eighth largest asset in the world by market cap. Although this figure is still below gold's total market cap of $18 trillion, it can no longer be ignored.
Institutionalization has also brought changes to market structure. The U.S. Bitcoin spot ETF has become an important channel for capital inflow into the crypto market, with total net inflows reaching $28.3 billion since its listing. This inflow of capital has not only driven up Bitcoin prices but also made its market volatility more complex.
My analysis is that we are at a critical juncture where Bitcoin is transitioning from the narrative of 'digital gold' to that of 'strategic reserve asset.' The Trump administration proposed establishing a strategic Bitcoin reserve, managing Bitcoin as a permanent national asset, which reflects this trend.
03 The significance for retail investors: opportunities and challenges coexist.
What does BlackRock's stance change mean for ordinary investors?
The entry of institutional investors has brought in huge amounts of capital, significantly affecting the supply-demand relationship in the Bitcoin market. By the end of 2024, 92 entities had publicly held nearly 2.718 million Bitcoins, accounting for 12.94% of the total Bitcoin supply.
This institutionalization is a double-edged sword for retail investors. The good news is that the market is becoming more mature, and investment tools are becoming more diverse; the bad news is that retail investors face institutional opponents with advanced data analytics tools and professional teams.
In my investment framework, I have a few suggestions for retail investors:
Firstly, shift to long-term investment to avoid direct competition with institutional investors during short-term volatility.
Secondly, leverage institutional 'blind spots' to focus on market sentiment, policy changes, and other unstructured information.
Thirdly, diversify investments and manage risks; do not concentrate all funds in Bitcoin.
Fourthly, maintain calm and patience, and stay rational amidst market fluctuations.
I believe that for retail investors, the key is to recognize that the market has changed. The past strategy of blindly chasing highs and cutting losses is no longer effective in an institution-led market.
04 Future Outlook: The evolving role of Bitcoin in investment portfolios.
Looking ahead to 2025, I believe the role of Bitcoin in investment portfolios will continue to evolve. The recognition by institutions like BlackRock is just a beginning, not an end.
As more traditional financial institutions venture into the Bitcoin space, we will see more innovative financial products emerge. For example, Goldman Sachs plans to spin off its cryptocurrency platform into a new company focused on creating and trading blockchain-based financial instruments in collaboration with strategic partners.
At the same time, the global regulatory framework for Bitcoin is gradually becoming clearer. The SEC has approved Hashdex's Nasdaq cryptocurrency index U.S. ETF and Franklin's crypto index ETF, indicating that regulatory attitudes are shifting towards a more balanced direction.
Bitcoin no longer poses a threat to fiat currency; instead, it competes with gold as a store of value. Federal Reserve Chairman Jerome Powell has stated: 'It does not compete with the dollar; it competes with gold.'
Yesterday, my neighbor Old Wang asked me: 'Can I still buy Bitcoin now? Have I missed the best opportunity?' I told him that the real opportunity lies not in timing, but in holding time. Bitcoin's 15-year history tells us that those who dare to hold on to value through bull and bear markets ultimately reap the rewards.
The market is entering an 'institutional era,' but this does not mean that retail investors have no opportunities. On the contrary, retail investors who understand the changing rules and adapt to the new environment may achieve better returns than purely institutional players.
Opportunities always favor the prepared. The theme for 2025 has already been revealed; do you understand it?
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