BlackRock, the $9 trillion largest asset manager on the planet, says Bitcoin is the answer to growing global financial disorder.
According to them, Bitcoin can act as a hedge against the increasing uncertainty and geopolitical turmoil that’s weakening trust in governments, banks, and fiat currencies.
They also called Bitcoin a “global monetary alternative.” BlackRock’s Bitcoin ETF has been one of the top performers since January 2024. After the fund’s launch, Bitcoin’s price soared to an all-time high of over $73,000.
The explosive growth of the IBIT ETF and other crypto-based ETFs has been driving much of the conversation in the finance industry.
Cryptos are also increasingly seen as alternatives to fiat currencies, especially with concerns about the U.S. dollar’s stability. Even though the dollar still holds a dominant position, diversification efforts are clear.
Central banks are exploring digital currencies to protect themselves from potential dollar collapse while embracing new technologies like blockchain and crypto.
Today, the dollar had gained 0.38% against the yen, trading at 142.905, after a dip to 140.71 the day before—the lowest since December 2023. The euro is hovering at $1.1007, not far from its weakest point since August.
Similarly, the British pound has taken a hit, sitting at $1.30360, a low last seen in late August. The U.S. consumer price index (CPI) rose by 0.2%, a repeat of July’s increase.
Core CPI, which excludes volatile food and energy prices, went up 0.3%, showing a faster rate of increase compared to July’s 0.2%. This data has changed expectations about the Federal Reserve’s rate cuts next week.
Many economists now believe that the Fed will go for a smaller, 25-basis point rate cut at its meeting, with the odds of such a cut rising to 80%. Although there’s still a chance of a 50-basis point cut, the likelihood has decreased.
The IMF has acknowledged the beginning of the Fed’s rate-cutting cycle as necessary. They believe this will help ease the economic slowdown while keeping inflation in check.
But they also caution that the Fed needs to stay flexible and adapt to changing economic data.