The world’s largest asset manager BlackRock sees Bitcoin (BTC) as a sustainable alternative to asset classes such as gold. Also fears, government regulation could stall Bitcoin, BlackRock gives a refusal.
With significantly more than $7 trillion in deposits, BlackRock is the world’s largest asset manager, BlackRock can influence markets. In terms of crypto-currencies, little has been heard of BlackRock so far, and therefore recent comments by CIO Rick Rieder on Bitcoin have attracted much attention. Rieder was interviewed on CNBC and excerpts from the interview were quickly posted on Twitter. Rieder does not want to commit himself whether BTC’s current price of a good 18,000 US dollars corresponds to its true value. But the man who has a decisive influence on investment strategies at BlackRock is certain: Bitcoin is not a temporary phenomenon, but rather “permanent”, “come to stay”.
"It's hard to say whether it's [#btc] worth the price it is trading at today. But do I think it is a durable mechanism that–do I think could replace gold to a large extent? Yeah I do, because it's so much more functional," says BlackRock's Rick Rieder. #bitcoin #cryptocurrency. pic.twitter.com/ipwr22xwZ1
— Squawk Box (@SquawkCNBC) November 20, 2020
Rieder argues briefly and handy per Bitcoin. When he is asked whether further high flights of BTC could not lead to attempts to regulate Bitcoin more strongly, Rieger smiles. Then he says: “Central banks are forging plans for state-guaranteed digital currencies (CBDC) and digital payment systems have long since become reality. The so-called Millennials are not only, according to Rieder, already accepting the new possibilities like Bitcoin anyway – in short: Regulation would quickly reach its limits with Bitcoin, Rieder can be interpreted as follows.
Just as interesting: Bitcoin is “so much more functional than moving an ingot of gold around”, says Rieder for BlackRock. Therefore he sees the potential for Bitcoin to take over the function of gold (as a store of value) on a large scale. Considering BTC as “digital gold” or “new gold” is increasingly gaining acceptance in the classic financial world, and BlackRock is now joining this group.
Conclusion: Bitcoin feels tailwind from Wall Street
Rieder expressly emphasizes not to be a BTC bull and says Bitcoin does not play a major role in BlackRock’s strategies so far. Also price prognoses it does not want to deliver under any circumstances. But fear of contact to crypto currencies does not have BlackRock obviously any longer – and that is remarkable. With BlackRock among other things institutional investors meet such as state funds and from the current position to a purchase recommendation for Bitcoin it is only a small step. Rieder rejects the concerns about regulation of Bitcoin and instead points to its advantages in direct comparison to gold. All this is under the line a clear signal per Bitcoin of BlackRock as a leading figure, if it concerns, how capital can be secured and increased in the medium and on a long-term basis.
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