Cryptocurrency

According to the CEO of Blackrock, crypto may be a great asset class, but it is not a substitute for currency

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Despite the successful launch of Coinbase stock on Wednesday, Blackrock CEO Larry Fink continued to raise concerns about the institutional rollout of crypto.

In an interview with CNBC’s Squawk Box on Thursday, Fink said he was “encouraged by how many people were focusing on crypto and the narrative related to it,” but he seemed to imply that his views remained largely unchanged after a large public exchange .

“”[Crypto] can be a great asset class, and I think it could be a great asset class, “said Fink.” I don’t think it’s a substitute for currency. […] I don’t think we should think about crypto as a substitute for currency. “

The Blackrock CEO was apparently more optimistic about the stablecoin idea, calling it “cryptocurrencies of dollars”. However, he added that the asset manager had not seen growing interest from institutions around the world, saying that climate risk, public deficit and inflation are getting more attention in his circles than crypto.

“We study it, we made money from it, but I’m not here to tell you that we are seeing widespread interest from institutions around the world. […] We had very little interconnectivity while conversing over crypto, other than one fascination. “

The CEO previously described Bitcoin (BTC) as an untested volatile asset in a “very small market” that has not yet proven its long-term viability. However, the company’s chief investment officer Rick Rieder said in November 2020 that “Bitcoin will stay here” and that the crypto asset would likely “largely take the place of gold”.

Asset manager BlackRock is indirectly involved in Bitcoin through its stake in business intelligence company MicroStrategy. The company initially invested $ 425 million in BTC last summer and has since added thousands more BTC to its holdings. After Bitcoin’s price hit an all-time high of more than $ 64,000 on Wednesday when Coinbase shares opened on Nasdaq, MicroStrategy’s shares rose more than 10% to an intraday high of $ 770.

Despite the seemingly mixed messages from Blackrock executives about crypto, the company may be looking into the possibility of getting more directly involved in the industry. In January, two prospectus filings for two of Blackrock’s funds were posted on the US Securities and Exchange Commission website. Both mentioned the potential use of bitcoin derivatives and other assets as part of their investment plan.

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Melinda Martin