During BlackRock’s third-quarter earnings call, CEO Larry Fink expressed his strong endorsement of Bitcoin and digital assets. Fink’s comment not only emphasized Bitcoin as an asset class in its own right, but also paralleled its booming importance with historical financial markets such as mortgages, now worth $11 trillion, and high-yield bonds.
BlackRock CEO praises Bitcoin
“We believe that bitcoin is an asset class in itself,” Fink said male Unequivocally. “It is an alternative to other commodities like gold.” He also revealed that BlackRock is actively working with institutions around the world regarding digital asset allocation. “The conversations we’re having with institutions around the world (are) about how to think about digital assets, and what kind of asset allocation there should be,” he explained.
Fink stressed the inevitability of digital assets becoming a global reality: “I believe that the use of digital assets will become a reality around the world.” Compared to the early days of mortgage and high-yield markets, Fink suggested that digital assets are on a similar path of growth and acceptance.
“Years ago, when we started the mortgage market, years ago when the high-yield market came along, they started out very slowly but they evolved as we built better analytics and data,” he recalls. “With better analytics and data, there has been more acceptance and market expansion. I truly believe we will see an expansion of the market for these digital assets.”
Contrary to the common narrative that regulation is the primary obstacle to adoption of digital assets, Fink argues that there are other factors that are more important. “I don’t really think it’s about regulation, more regulation and less regulation,” he emphasized. “I think it’s a function of liquidity and transparency, and through that process, it’s no different than when (…) I built better analytics and data.”
Fink also highlighted the transformative potential of blockchain technology and artificial intelligence in expanding digital asset markets. “We believe this blockchain technology will become very additive,” he said. “Then you will overlay artificial intelligence, and through better data analytics, these markets will be applied and expanded.”
Besides Bitcoin, Fink specifically mentioned Ethereum, noting its potential for significant growth: “I think the application of this type of investment will expand to include Ethereum’s role as blockchain can grow significantly.”
Addressing the digitization of national currencies, Fink distinguished between digital assets such as Bitcoin and central bank digital currencies (CBDCs). “How does each country look at their own digital currency? This is a completely different asset than Bitcoin itself,” he explained. “We are seeing great success in India and Brazil in digitizing their currency for various different reasons.”
When talking about the potential impact of the US presidential election on Bitcoin and the entire cryptocurrency market, Fink was dismissive of any significant impact. “I’m not sure whether the president or any other candidate would make a difference,” he commented, noting that other market forces were the primary driver for adopting the policy.
At press time, Bitcoin was trading at $65,600.
Featured image created with DALL.E, a chart from TradingView.com