The world’s largest asset manager asserts that there isn’t sufficient Bitcoin (BTC) to satisfy the demand from American millionaires.
In a recent report titled “Why Bitcoin? A Perspective from Model Portfolio Builders,” BlackRock analysts Michael Gates and Brett Wager highlight that Bitcoin’s demand is inelastic, contrasting sharply with gold.
The analysts emphasize that, unlike the yellow metal, BTC cannot accommodate excess demand through increased supply due to its hard-capped supply and predetermined inflation schedule.
“It is well-known that there is a predictable issuance schedule for new bitcoin until 2140, capped at a maximum supply of 21 million tokens. However, not as widely recognized is that the actual available float may be significantly smaller, with a conservative estimate suggesting that 3 to 4 million bitcoins are considered permanently inaccessible (and thus out of circulation) because of lost, forgotten, or otherwise destroyed keys.”
“To illustrate the scarcity of available bitcoins, if every millionaire in the U.S. requested their financial advisor to acquire one bitcoin, there wouldn’t be enough to satisfy that demand.”
BlackRock’s Model Portfolio Solutions team views several “substantial arguments that underscore Bitcoin’s long-term investment potential.”
“Specifically, it may act as a novel store of value and a global monetary alternative, a hedge against U.S. dollar dominance and political instability, as well as a proxy for the broader shift from ‘offline’ to ‘online’ goods and services—amplified by the demographic shift from boomers to millennials. Collectively, these characteristics might offer unique and additional sources of risk premiums and diversification for traditional multi-asset portfolios.”
At the time of writing, Bitcoin’s trading price is $85,381.
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