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BlackRock is monitoring crypto to find countercyclical benefits

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  • BlackRock is tracking the performance and conditions of the virtual currency market
  • Following the current scenario, the assets manager stated that it is too early to determine whether such assets are speculative trading tools
  • The investment firm claims that digital assets will play a role in the future like traditional Gold

BlackRock is a global investment manager based in the United States. Following several institutions jumping in the crypto wagon, BlackRock also shows interest in the assets. On Wednesday, Reuters revealed that the firm is monitoring the emerging asset class like Bitcoin. The firm’s steps are the response to its clients’ demand for whether the firm will invest in such assets. The investment firm aims to determine whether digital currencies could offer countercyclical benefits. 

BlackRock claims crypto could play a role in future

BlackRock is the world’s largest asset manager, with approximately $9 trillion assets under management. According to Larry Fink, the chief executive officer of BlackRock, the firm is studying the evolution of crypto assets. Moreover, the assets manager observes what such assets mean, the infrastructure, and the regulatory landscape.

Observing virtual assets, Fink stated that it is too early to determine whether such assets are just speculative trading tools. Indeed, the firm thinks that such currencies could potentially play a role in the longer time frame.

Does crypto help gain profit?

Many large institutions have generated tremendous profits from the volatility of crypto assets. Several retail investors who dived in the market earlier have also seen good returns. However, the recent crash has burnt the funds of several fresh investors. 

BlackRock has studied the current cryptocurrency market conditions and performances. According to Fink, it is noteworthy that brokers are the ones in the market making most of the profits from the volatile nature of digital assets.

Can digital assets replace traditional Gold?

Last year when the bullish rally of cryptocurrencies began, the performance of the market seemed directly proportional to the traditional Gold. However, as the bullish market ended, crypto now appears to be inversely proportional to the traditional asset. 

When the Gold market has now been continuing to surge upwards, the crypto market has sharply fallen. And the primary reason behind the falling prices is the regulatory scrutiny that the cryptosphere is facing globally. Also, the plunging market has upset several fresh retail investors. 

However, BlackRock monitored crypto assets and claimed that these assets could someday play a role in a longer timeframe. And traders will be investing in such asset classes similar to Gold.

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