BlackRock: Bitcoin is ‘gold alternative,’ Ethereum a ‘technology bet’

As a seasoned analyst with years of experience in the financial markets and a keen interest in digital assets, I find BlackRock’s dual pitch deck for Bitcoin (BTC) and Ethereum (ETH) intriguing and insightful.

BlackRock, the world’s largest asset manager, recently presented unique yet different pitch decks for Bitcoin [BTC] and Ethereum [ETH].

At a digital assets conference held in Brazil, the two-part presentation highlighted BTC being proposed as a ‘risk-averse’ investment option, comparable to or surpassing the value of gold. BlackRock’s Robbie Mitchnick made this suggestion during his speech.

On the other hand, ETH was pitched as a ‘risk-on’ asset, similar to U.S. stocks.

BTC as money; ETH as a bet

The asset manager praised BTC as a global monetary alternative and an excellent hedge against declining trust in governments and fiat currencies’ relentless debasement (devaluation).

BlackRock: Bitcoin is ‘gold alternative,’ Ethereum a ‘technology bet’ – Why?

Instead, ETH was presented as a risky wager on the growth of blockchain technology, analogous to investing in U.S. stocks, according to Mitchnick’s perspective.

He noted,

As a crypto investor, I view Bitcoin (BTC) as a digital equivalent to gold – a store of value that can serve as an alternative to traditional investments like stocks and bonds. On the other hand, Ethereum (ETH) represents a long-term technological bet for me. I believe its blockchain has the potential to create more use cases and generate increased economic value over time, making it an exciting investment opportunity in the rapidly evolving crypto space.

A segment of the cryptocurrency enthusiasts agreed with Mitchnick’s talks, emphasizing that Bitcoin functions like traditional money, offering lower annual inflation compared to conventional fiat currencies, which depreciate in value over time.

But it also settled the raging debate that has been going on for a while: ETH isn’t money. In fact, since the introduction of Blobs earlier this year, ETH’s inflation has hiked, making it less of an “ultra-sound money.”

As an analyst, I foresee a potential scenario where, given current projections, Bitcoin (BTC) may surge further amidst future geopolitical upheavals due to its perceived safe-haven status. Conversely, Ethereum (ETH) might experience a dip in such tense circumstances as investors may favor more stable assets over it.

BlackRock’s viewpoint holds significant importance because they are seen as trailblazers and highly respected in the industry. Together with Grayscale, these asset managers have been credited for driving the shift and eventual approval of U.S.-based Bitcoin Spot ETFs.

Ever since their introduction, BlackRock’s ETFs have consistently surpassed all other alternatives and achieved significant benchmarks.

Currently, when this statement is being made, the iShares Bitcoin Trust (IBIT) has accumulated a total net inflow of approximately $21.5 billion and holds around $23 billion in total assets.

In other words, ever since it started trading in July, the Ethereum ETF offered by BlackRock, named ETHA, has accumulated a grand total of $1.1 billion through inflows.

Therefore, being the world’s biggest investment manager, they have the potential to shape other investors’ perceptions about the sector. As some market analysts suggest, their stance appears to be that Bitcoin functions as currency, whereas the rest of cryptocurrencies are viewed more as speculative investments.

Currently, Bitcoin is priced at approximately $62,000, representing a 5% decrease in value compared to its weekly performance. In contrast, Ethereum is currently valued at around $2,400, showing an 8.5% drop over the same time frame.

2024-10-07 06:15

BTC as money; ETH as a bet

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