Blackrock: “cryptocurrencies could be a great asset class”

Yesterday, during the launch of Coinbase’s IPO on the Nasdaq, CNBC interviewed Blackrock CEO Larry Fink who talked about cryptocurrencies saying that they could become a “great asset class”.

During the same interview, however, Fink stated that Blackrock has not received many requests to invest in bitcoin from its institutional clients for whom it manages nearly 9 trillion in assets.

“I am still watching. We are investing in it. We are studying it. We made money on it. Our investors worldwide, we don’t have that much inquiry on it.”

Blackrock: cryptocurrencies will not replace money 

According to Blackrock’s CEO, cryptocurrencies will not replace fiat currencies like the dollar, but it is certainly evident that many people are focusing on these assets:

“I’m still fascinated about it. I’m encouraged by how many people are focusing on it. I’m encouraged about the narrative. It may become a great asset class.I do believe this could become a great asset class, cryptocurrency. I don’t believe it’s a substitute for currencies. I think we are going to have cryptocurrencies of dollars, cryptocurrencies of other currencies.”

Then talking about how interested his own investors are in crypto assets, Fink replies:

“We are not having those conversations. Maybe they are talking to somebody else. I don’t want to suggest that we have perfect information but our broad base client relationships, we have had very little interconnectivity on the conversation on crypto other than a fascination.”

Indeed, it seems that one of the issues their investors are concerned about is the environmental risk that for example bitcoin mining might pose:

 “The amount of conversation we are having on climate risk and how they can navigate their portfolios is a major component of the conversation. The conversation about deficits and the conversation we are having on inflation risk is far more dominant for our clients worldwide than the whole conversation about crypto”.

As for the events surrounding WallStreetBets and their posts on Reddit driving up the price of Gamestop, Blackrock’s CEO explains that their clients were not particularly concerned, but at best fascinated by what was happening to the market:

“We didn’t have any conversations around Reddit and Gamestop and what does that mean with our clients either, and yet it represents a major component of the markets. It’s fascinating to watch. So, I do believe there is a component of the financial markets about crypto that is real, that is growing. But, if you’re asking specifically about long-term investing, from sovereign wealth funds, from pension funds, from retirement services, from big family offices, the conversation about crypto is a very minor conversation compared to other conversations.”

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