Reprinted from: Zhitong Finance Network
Larry Fink, CEO of the world's largest asset management company (BlackRock), said in a recent interview that he has transformed from a "proud skeptic" of Bitcoin (BTC-USD) to someone who believes that this cryptocurrency will have a place in people's portfolios. Fink also followed the example of cryptocurrency fans and called Bitcoin "digital gold", and even said that he "firmly believed" that Bitcoin's prospects would be very optimistic, emphasizing that he was worried about the US government's deficit problem, and that Bitcoin was expected to become a hedging tool in the uncertainty of the US political situation.
The head of the world's largest asset management institution, who had long been extremely skeptical of the digital currency Bitcoin, gave a comprehensive overview of his changed views on Bitcoin in an interview with the media on Monday. Fink said on Monday that his long-term position on Bitcoin was "a proud skeptic", but after in-depth research on Bitcoin and until the approval and issuance of the Bitcoin spot ETF, he determined that his previous views were "wrong."
During his interview on Monday, bitcoin was trading at its highest point in about two weeks above $64,000, driven by the full force of the “Trump trade trend” in which the former U.S. presidential candidate and president fully supported the development of the cryptocurrency sector during his campaign.
Trump has repeatedly stated during his campaign that he will fully support cryptocurrencies and said he will speak at a Bitcoin conference in Nashville in July. In mid-June, he also met with many representatives of US Bitcoin mining companies to express his support for the crypto mining business. In May of this year, Trump's campaign team began to accept donations from the crypto industry, and his views on the future of such digital assets have become increasingly positive.
Kyle Rodda, senior financial market analyst at Capital.com, said that after the shooting of Trump, he saw many clients flowing funds into Bitcoin and gold. And cryptocurrencies did accelerate their rise over the weekend when the shooting occurred. He said: "The news marks a change in American political norms and an emergency of greater political violence. For the market, this means safe-haven trading, but it will tend to be more inclined to non-traditional safe-haven assets such as Bitcoin."
It is understood that Fink, the "helmsman" of BlackRock, said in an interview that Bitcoin "is a legitimate financial instrument that allows you to obtain uncorrelated, low-risk returns." On the same day, BlackRock announced its second-quarter profits and revenue, both of which exceeded the general expectations of Wall Street analysts. The agency also stated that the total assets under management increased by $1.2 trillion year-on-year to $10.6 trillion, continuing to rank among the world's largest asset management institutions.
It is understood that BlackRock, the world's largest asset management institution, custody and operates the Bitcoin Trust ETF (IBIT.US). Since its launch in January this year, this Bitcoin ETF has attracted more than US$19 billion in funds and has been firmly at the top of the list of Bitcoin ETF funds in the U.S. stock market since its launch.
"I firmly believe that Bitcoin has an important role to play in a portfolio," Fink said, labeling the $1.26 trillion cryptocurrency "digital gold." "I think it's the instrument you should invest in when you're panicking, especially when you believe that some countries are devaluing their currencies because of excessive deficits," he said. Bitcoin also works for a group of investors seeking an investment vehicle that's not controlled by the state, he said.
Fink’s latest comments are a complete about-face on Bitcoin. In 2017, Fink called Bitcoin a “money laundering index” at an Institute of International Finance conference, but his attitude toward Bitcoin has visibly warmed over the years. In 2020, he told the Council on Foreign Relations that Bitcoin has a good chance of “evolving” into a global market asset.
Bitcoin prices have rebounded sharply since last week. The price of Bitcoin is currently hovering around $64,000, a sharp rebound from the interim low on July 5. Some cryptocurrency traders are increasing their bets that Bitcoin will hit a new record high before the end of the year as they are optimistic about the Federal Reserve's dovish bets on at least two rate cuts this year and the increase in funds flowing into Bitcoin exchange-traded funds (BTC ETFs).
Last month, analysts at Standard Chartered Bank said the U.S. presidential election is the next key catalyst for Bitcoin prices, and Trump's victory could push Bitcoin prices to $150,000 by the end of the year.
Michael Novogratz, founder and CEO of Galaxy Digital, said that a more positive political environment in the United States for digital assets could help push Bitcoin to a record high of $100,000 by the end of the year, or even higher. He said in an interview: "If the price of Bitcoin goes to $73,000 in the next few weeks or so, it will go to $100,000 or more by the end of the year."
