- The CEO of BlackRock, the fund that holds the largest amount of assets in the world, has an ambiguous opinion regarding the future of the cryptocurrency sector.
- On the one hand, Fink understands that blockchains will be the basis of the next generation of securities markets. Not for nothing did he sign a multi-billion dollar deal with Coinbase.
- On the other hand, he says that there are too many crypto companies today and that many have no backbone, so they will disappear.
Bitcoin, Ethereum and other major digital currencies have suffered a big drop in 2022 since prices started to pull back from the second quarter.
The price of Bitcoin fell nearly 70 percent so far this year to $17,000 per unit, taking with it the price of Ethereum, the second-largest crypto by volume, and prompting fears that the market could be heading not only for a debacle, but, worse, oblivion and extinction.
In this regard it is timely to rescue the words of Laurence Fink, CEO of BlackRock, the world’s largest investment management firm with $8 trillion in assets, which has signed an agreement with the cryptocurrency trading platform Coinbase.
Fink predicted that cryptocurrency blockchain technology will be the beginning of the generation of markets to come.
“I think the generation of markets to come, the next generation of securities, will be blockchain technology,” noted the BlackRock CEO, who had earlier expressed skepticism about digital currencies in remarks with the New York Times.
BlackRock on the future of cryptocurrencies
The blockchain technology of Bitcoin and the other digital currencies provides the ability for traditional assets to tokenize on a public ledger, which will make a transfer of stocks, bonds, real estate and alternative investments cheaper and easier.
“What’s more, I believe blockchain technology will be critical,” Fink added. “Imagine instant settlement of bonds and stocks, with no mediator, we will be able to lower fees radically. It changes the whole ecosystem,” he added
However, the BlackRock CEO warned that many of the world’s cryptocurrencies and major crypto companies will not survive, noting that the fall of cryptocurrency exchange platform FTX is misaligned with the foundation of the crypto world.
The platform’s reliance on its digital currency exchange FTT, which was used as collateral for loans, was instrumental in its collapse after FTT’s value plummeted.
“I think a lot of the companies are not going to exist,” Fink noted. BlackRock made indirect investments of more than $24 million in FTX. However, it was not at the core of the Fink-led company’s business, the CEO said.
A few months ago, the investment manager launched a blockchain company exchange-traded fund, giving investors exposure to more than 30 different companies.
Bitcoin price at the end of 2022
At the same time, pricing analysts of digital currencies such as bitcoin and Ethereum are trying to gauge market sentiment after two major Fed shakeups a few days ago.
“The economic data released last week sent a mixed signal and BTC lost its way after hitting $17,000 per bitcoin,” Yuya Hasegawa, crypto market analyst at Bitbank, said at a public conference.
“By surprise, Bitcoin is headed to test the lower boundary between July and October, when the value plunged due to the FTX plunge in November. It is unlikely that the price will ever go above $17.6k,” he added.