Blackrock CEO Claims Bitcoin Can Fix Inflation, Currency Devaluation

By: Michael Wilson

Blackrock CEO Claims Bitcoin Can Fix Inflation, Currency Devaluation

July 7, 2023 9:25 AM

According to Larry Fink, CEO of the world's largest asset manager, Blackrock, bitcoin is an international asset that may be used instead of gold to hedge against inflation, a country's onerous difficulties, and currency depreciation. 

Blackrock has stated that it is cooperating closely with regulators in order to have its spot bitcoin trust exchange-traded fund (ETF) application approved by the U.S. Securities and Exchange Commission (SEC).

Blackrock Chairman and CEO Larry Fink gave an interview to Fox Business on Wednesday, where he discussed bitcoin, crypto investments, and Blackrock's filing for a spot bitcoin trust exchange-traded fund (ETF).

On June 15, the largest asset management in the world submitted paperwork to the U.S. Securities and Exchange Commission (SEC) to begin trading a spot bitcoin trust exchange-traded fund (ETF). Since then, the value of bitcoin has risen as the crypto world anticipates that the Securities and Exchange Commission will soon approve the first spot Bitcoin ETF in the United States. Last Thursday, Blackrock revised its application, citing the Nasdaq-listed cryptocurrency exchange Coinbase as the spot bitcoin trust's custodial surveillance partner. Blackrock has a strong track record of having ETFs authorized, with only one rejection in 576 submissions.

In general, Fink stated, "We try to do it properly for the benefit of every long-term investor, and I believe we have an excellent record of dealing with our regulators and trying to ensure that sure we have thought about every concern around any filing." He continued, saying:

"We have a strong relationship with our regulators and are eager to learn about any concerns so that we can address them."

Fink elaborated, "We hope that, like in previous years, we could be working with our regulators and getting the filing approved one day, and I have no idea when that one day is, but we'll see how that all plays out."

The Blackrock executive then discussed Bitcoin. "Specifically on Bitcoin, as I've said before, we believe in product digitization," he explained. The introduction of exchange-traded funds was a game-changer for the mutual fund business, and ETFs are now widely considered to be the dominant investment vehicle in this sector. We feel that if we can increase the tokenization of assets and securities, which is what bitcoin is, it would once again change finance." He said, "We believe our regulators look at the filings as a way of democratizing crypto."

In reflecting on his initial cynicism regarding Bitcoin, Fink said that his concern stemmed from the cryptocurrency's affiliation with "illicit activities" during its early usage before BTC became more available. In addition, the Blackrock CEO stated:

"Also, I believe that the job of cryptocurrency is to digitize gold in many respects — rather than investing in gold as a hedge against inflation, a hedge against the onerous difficulties of any one government, or a hedge against the devaluation of your currency, wherever you are. Let's be clear: Bitcoin is a global asset. Because it is not reliant on a single currency, it might represent an asset that individuals can use as an alternative."

When asked if he owned Bitcoin, Fink stated, "I don't own anything other than mutual funds and ETFs." Fink outlined the benefit of Bitcoin's core technology:

"In fact, I think the underlying technology is great."

He elaborated, saying that "the blockchain will assist you to accelerate the processes of transactions" and "will help you identify." Fink stated that knowing who the buyers and sellers are, "we don't need custodians anymore," which would result in an unraveling of the entire financial process and brokers. Nonetheless, the Blackrock executive admitted, "We are not close to there, but it is a technological advancement." It's the same enthusiasm that surrounds AI and what it can do."