Fink: Bitcoin having 'real impact' on the dollar

BlackRock CEO - and Bitcoin sceptic - Larry Fink warms to the cryptocurrency in conversation with former BoE Governor Mark Carney

Speaking at the Council on Foreign Relations alongside former Bank of England Governor Mark Carney this week, the CEO of BlackRock joined the recent slew of prominent figures from the world of finance re-evaluating Bitcoin, albeit only a moderate re-evaluation. Larry Fink, who heads up BlackRock, the world’s largest asset management firm, observed that the cryptocurrency is having a “real impact” on the US dollar, making it “less relevant.”

Fink said: “I'm not talking about for Americans, I'm talking about for international holders of dollar-based assets. Does [digital currency] change the need for the dollar as a reserve currency, if there was a true digital currency that was separated from dollar-based assets?” He also recognised the possibility that Bitcoin could evolve into a global market, while maintaining that it is “still untested” and “a pretty small market relative to other markets”.

If not exactly a full-throated endorsement of the digital currency, Fink’s comments demonstrate the way in which attitudes towards Bitcoin have changed in less than three years. Speaking at the Institute of International Finance in 2017, the CEO of the $7trn (£5.2tr, €5.8tr) firm, joked: “Bitcoin just shows you how much demand for money laundering there is in the world. That’s all it is. It’s an index of money laundering.”

Fink is by no means the first critic to adopt a more open attitude towards the cryptocurrency. Only four days ago, the prominent historian Niall Ferguson argued in a Bloomberg opinion piece that “Joe Biden’s nascent administration should recognise the benefits of integrating Bitcoin into the US financial system”. Up until 2019, the author of The Ascent of Money had argued that money required a state to sustain it and described Bitcoin as a “complete delusion”.

The second half of 2020 has seen an acceleration in the acceptance of Bitcoin by institutional investors and prominent commentators. Votes of confidence from the likes of MicroStrategy, Square and PayPal has helped drive the crypto to new all-time highs.

Commenting on this recent bull run, BlackRock’s chief investment officer (CIO) Rick Rieder observed that Bitcoin is “here to stay” and postulated that it could even eventually surpass gold.

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By mid-afternoon, Bitcoin was trading down 0.7 per cent at $18,970.

 

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