The largest asset manager in the world says there is not enough Bitcoin (BTC) to meet the demand from American billionaires.
In a new report titled “Why bitcoin? A perspective from model portfolio builders,” BlackRock analysts Michael Gates and Brett Wager details how Bitcoin is inelastic to demand, unlike gold.
Unlike the yellow metal, the analysts point out that BTC has no ability to meet excess demand with increased supply, as its supply is hard-capped and its inflation schedule is already set in stone.
“As many know, there is a predictable issuance schedule of new bitcoin until 2140 with a pre-programmed max supply of 21 million tokens. However, less widely known is that the real available float is likely far smaller, with a conservative estimate of 3 to 4 million issued bitcoins visible on the blockchain but considered permanently inaccessible (and therefore out of circulation) due to lost, forgotten, or otherwise destroyed keys.
To illustrate how few available bitcoins there are, if every millionaire in the US asked their financial advisor to get them 1 bitcoin, there wouldn’t be enough.”
BlackRock says that its Model Portfolio Solutions team sees several “substantive arguments that support Bitcoin’s long-term investment merit.”
“Namely, to potentially serve as a novel store of value and global monetary alternative, hedge to US dollar hegemony and political instability, and proxy play on the broader ‘offline’ to ‘online’ digital transition of goods and services – supercharged by ‘boomer-to-millennial’ demographic tailwinds. Collectively, these features may help provide unique and additive sources of risk premia and diversification to traditional multi-asset portfolios.”
At time of writing, Bitcoin is trading at $85,381.
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