According to BlackRock chairman Larry Fink, institutional investors are more concerned about climate change and inflation than about what cryptocurrencies can bring to the table. Speaking in CNBC’s Squawk Box program, the CEO of the largest money manager and risk management firm said that cryptocurrency does not occupy much space in conversations with clients other than being a fascinating topic to muse about. The crypto industry gained massive mainstream exposure this year following bitcoin’s unprecedented rally.
The CEO admitted BlackRock has made some investments in Bitcoin.
Larry Fink believes that crypto can become a great asset class, admitting that BlackRock has made some investments in Bitcoin. “We’re studying it. We make money on it, but I’m not here to tell you that we’re seeing broad-based interest by institutions worldwide,” BlackRock CEO explained. Fink’s comments seem to be contrary to popular opinion among crypto enthusiasts, given that the leading cryptocurrency bitcoin has made significant ATH from its paltry $20,000 in 2017. Presently, each Bitcoin is trading at $61,480, according to crypto aggregator Coinmarketcap.
Institutions warm up to cryptocurrencies.
Legacy financial institutions like Goldman Sachs and JP Morgan are slowly securing a spot for themselves in the new digital economy. Tesla, MicroStrategy, Square, and a growing number of tech companies are diverting their cash reserves and staking them in Bitcoin. But Fink says this does not make much of a difference to BlackRock’s institutional clients. According to Larry Fink, the amount of conversation on climate risk and how portfolios can be managed is a major part of the conversation whenever they meet. He also said that inflation risks feature dominantly with BlackRock’s clients globally. Even though crypto is here to stay, the chief investment officer at CalSTRS, Chris Ailman, told CNBC that it might be too early to decide if it will become an entirely new asset class.