Blackrock switched to Bitcoin after an insider alert on high inflation

Amid rising inflation, BlackRock, a leader in asset management, is shifting focus to Bitcoin as a hedge.

The strategy follows reports that a Bureau of Labor Statistics (BLS) economist shared exclusive inflation data with major Wall Street firms, including BlackRock.

BlackRock already receives inflation data.

Bloomberg obtained records from a BLS economist showing frequent correlations between the consumer price index (CPI) and the consumer price index (CPI) of U.S. inflation, particularly for housing and used cars. These exchanges show that the economist has a detailed understanding of the group he calls “my super-users.”

“This information gives traders a lot of leverage in their trading. How is this not insider trading?” said the X account's insider tracker.

The discovery of these relationships has led to investigations into their potential impact on asset trading and Federal Reserve policies. In response, BLS Associate Commissioner for Publications and Special Studies Emily Liddell emphasized the agency's commitment to equity.

“This has been an embarrassment to the agency. The public puts a lot of trust in us to be fair, and our data providers put a lot of trust in us to keep their data safe. It is our goal to repair this trust.” Liddell explained.

Read more: How to protect yourself from inflation using cryptocurrency

After these disclosures, BlackRock was particularly active in its bullish stance on Bitcoin. The limited supply and decentralized nature of cryptocurrency make it a hedge against inflation.

This strategy is proving useful following the International Monetary Fund's recent warning about the US fiscal deficit, which it says is causing inflation and global risks. BlackRock CEO Larry Fink recently shared his positive view of Bitcoin.

“I am very bullish on the long-term viability of Bitcoin. I was surprised how much that turned out. We're creating a more liquid, more transparent market now, and it's amazing to me and I couldn't have predicted before we filed that we'd see this kind of retail demand,” Fink said.

This optimism is reflected in the performance of BlackRock's iShares Bitcoin Trust (IBIT), which has accumulated more than $15.3 billion, a fast-growing Bitcoin ETF.

Read more: How to trade Bitcoin ETF: A step-by-step approach

However, this week. Interest in the spot Bitcoin ETF appears to be slowing. Notably, IBIT earned just $117.3 million in revenue over the past three days. Despite the slowdown, with a record low of $18.1 million in outflows this Wednesday since its inception in January 2024, the ETF's success reflects a shift in investor preferences amid financial uncertainty.