In 2023, a shocking piece of information upended the financial market when BlackRock, the world's largest asset management company, publicly filed for a spot Bitcoin ETF. This marks a complete shift in BlackRock's perspective on Bitcoin, transitioning from skepticism to strong support. In the eyes of global investors, this move by BlackRock has opened new expectations for the future of Bitcoin. So the question arises, what have Larry Fink and the team at BlackRock seen in Bitcoin that the rest of the world has not noticed?
The influence of BlackRock
With over $10 trillion in assets, BlackRock is not only the largest asset management company in the world but also one of the most influential entities in the financial sector globally. Many even liken BlackRock to an 'invisible giant' that dominates global economic and political trends. Not stopping at investment, BlackRock is also seen as a 'blueprint' for other financial institutions. Every decision made by BlackRock is carefully scrutinized and even emulated by other asset managers. This means that when BlackRock acts, the world pays attention.
Previously, BlackRock's CEO Larry Fink expressed a rather unfriendly view of Bitcoin. He believed Bitcoin was not a tool for hope and even suggested it lacked safety for investors. However, within a few years, his stance has changed 180 degrees, and now BlackRock not only supports but also leads efforts to bring Bitcoin closer to traditional investors. So what has caused them to change so quickly?
The impact of crises on Bitcoin
In 2023, before BlackRock announced its Bitcoin ETF application, Bitcoin and the cryptocurrency market were facing unprecedented difficulties. The collapse of the FTX exchange severely undermined investor confidence in cryptocurrencies, and many believed that this industry would need years to recover. At the same time, in the US, the government under President Joe Biden and Senator Elizabeth Warren has implemented strict measures against cryptocurrencies, referred to as 'Chokepoint 2.0,' aimed at tightly controlling and limiting the activities of this market.
The SEC, under the leadership of Gary Gensler, has continuously filed lawsuits against cryptocurrency companies, while the US government has printed a large amount of money leading to rising inflation and the dollar's value being affected. In this context, news of BlackRock's Bitcoin ETF application immediately impacted the market, causing the value of Bitcoin to soar and rekindling new confidence in the future of cryptocurrency.
What BlackRock knows: The threat from the dollar
It can be said that BlackRock has recognized something that most Americans have either not noticed or do not want to admit: the US dollar is gradually losing its strength. The US economy is currently in a downturn, and signs of economic instability are becoming increasingly clear. With national debt exceeding $35 trillion, the financial situation in the United States is becoming increasingly serious. Experts believe that the US can maintain its current status thanks to the dollar's position as the global reserve currency, allowing them to print money to cope with debt without suffering too many consequences.
However, like anything, the printing of money cannot last forever. This is only a temporary solution and cannot address the root causes of America's financial issues. Along with rising inflation, more and more countries worldwide are deciding to reduce their dependence on the dollar, which is causing the value of the US currency to decline.
Why Bitcoin could be the new 'safe haven'?
As the dollar is no longer a safe haven for assets, more and more people are beginning to seek other assets capable of holding value over time and not affected by inflation. This is why Bitcoin has become a target for major investors. Unlike fiat currency, Bitcoin has a fixed supply of 21 million coins, which cannot be printed more, making it a scarce asset. With its decentralized nature, Bitcoin is not dependent on any government or organization, making it an ideal safe haven in an unstable economic context.
BlackRock may have seen this and believed that investing in Bitcoin is a wise move to protect the value of its clients' assets in the future. Moreover, BlackRock's application for a Bitcoin ETF will help attract interest from other major institutional investors, creating a positive growth cycle for Bitcoin.
Conclusion
BlackRock's shift in perspective and strong investment in Bitcoin is not just a signal for the market but also reflects their long-term vision. As traditional financial markets struggle and the dollar loses value, Bitcoin could emerge as an alternative solution to protect assets. In the future, we may see many other major companies following in BlackRock's footsteps and participating in the Bitcoin market, bringing a new wave of growth for cryptocurrencies. While we cannot definitively say what will happen, one thing is clear: BlackRock knows something that we do not – and perhaps this is the time we should pay more attention to Bitcoin.