BlackRock CEO sees huge opportunities in crypto but skeptical about value

abdelaziz Fathi

BlackRock CEO Larry Fink said Wednesday while he sees “huge opportunities” for cryptocurrencies, he’s likely aligned with JPMorgan CEO Jamie Dimon’s view that bitcoin is “worthless.”

The boss of the world’s largest asset management firm added that he is unsure how the crypto space will fare over the long term.

“I’m not a student of bitcoin and where it’s going to go, so I can’t tell you whether it’s going to go to $80,000 or zero, but I do believe there’s a huge role for a digitized currency and I believe that’s going to help consumers worldwide. Whether it’s bitcoin or something else or more of a governmental official digital dollar, that will play out,” Fink said in an interview on CNBC.

Though Fink said BlackRock has monitored the evolution of crypto assets, its infrastructure and regulatory landscape, he noted that he is “probably more in the Jamie Dimon camp.”

JPMorgan CEO, who has made it clear in the past that he is no fan of Bitcoin, reiterated his sentiment Monday, calling bitcoin “worthless” and comparing its trading to smoking cigarettes.

“It makes no difference to me — I don’t think you should smoke cigarettes either. Our clients are adults. They disagree. That’s what makes markets,” Dimon added.

BlackRock, which has almost $8 trillion in assets under management, has allowed two of its biggest funds to engage in Bitcoin derivatives. According to documents filed with the SEC in January, BlackRock has added bitcoin futures to derivatives products that its two funds can invest in. BlackRock Global Allocation Fund Inc. and BlackRock Funds V are cleared to invest in commodities, currencies, interest rates, credit events or indices.

The company cited several risks for its possible involvement in cryptocurrencies including regulatory changes, valuation issues and illiquidity risk as bitcoin futures are not as heavily traded as other futures and its ‘market is relatively new’.

Moreover, BlackRock reminded its investors that crypto exchanges have repeatedly experienced technical and operational issues, making bitcoin prices unavailable at many times. In addition, the asset manager further states that the nascent market has been the target of fraud and manipulation, which ‘could adversely impact’ the performance of its funds.

At the time, BlackRock CEO provided a somewhat bullish take on the world’s first cryptocurrency. In a relatively rare endorsement, Fink said Bitcoin has ‘caught the attention’ and could largely replace gold but warned of its growing popularity that has a real impact on the US dollar.

Back then, Fink, who has grown BlackRock into the world’s largest money-management corporation, dismissed bitcoin as nothing more than a vehicle for speculation and money laundering.

Furthermore, BlackRock had been on the lookout for crypto talent in late 2020, having notably posted a job opening for a VP of blockchain.

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