Have institutions changed their views? How do financial giants like BlackRock and Goldman Sachs currently view Bitcoin?
After Coinbase's successful listing, it seems that cryptocurrency assets have once again attracted the attention of institutions and investors. Traditional financial giants like BlackRock and Goldman Sachs have recently expressed their views on Bitcoin, with mixed opinions. The debate on whether Bitcoin has "not yet" become mainstream and has significant growth potential, or if it has reached its ceiling, remains intriguing.
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BlackRock's Bitcoin Outlook
BlackRock, one of the world's largest investment management companies, recently had an interview with CNBC where CEO Larry Fink expressed optimism about the U.S. stock market. He mentioned that the large amount of cash accumulated last year will soon be injected into the market, leading to an "extremely bullish" market.
Regarding cryptocurrencies, he maintained his previous views, acknowledging its potential but noting the lack of widespread participation at present:
I'm fascinated by cryptocurrencies. The attention and narratives around cryptocurrencies excite me, and it could become a great asset class; we have done research, profited from it, but we have not seen broad interest from global institutions.
He also emphasized that cryptocurrencies could serve as an alternative to fiat currencies, such as stablecoins pegged to the U.S. dollar, but they cannot replace fiat currencies. He objectively stated:
In conversations with institutions, we do not discuss Reddit, GameStop, cryptocurrencies, etc. I know that these are very fascinating topics, and I believe that cryptocurrencies are real and continue to grow, but their share in the overall financial market is too low. Sovereign wealth funds, pension funds, family offices, etc., do not discuss these.
"It may become a great asset class and I do believe this can become a great asset class," says Larry Fink. "I don't believe we should think about #crypto as a substitute of currency."#btc pic.twitter.com/ykGNhZqVT7
— Squawk Box (@SquawkCNBC) April 15, 2021
Back in late November, BlackRock's Global Fixed Income CIO Rick Rieder also shared his views on Bitcoin, but he appeared more optimistic than the CEO:
"It's hard to say if it's worth buying at the current trading price. But, is it a durable mechanism? Can it largely replace gold? Yes, I think so, because in terms of value transfer functionality, it is much more useful than gold bars."
Goldman Sachs' Misjudgment of Bitcoin
In May last year, during a conference call, Goldman Sachs discussed Bitcoin and cryptocurrencies, contrary to the positive outlook expected by many. Not only was the discussion brief, but the presentation also stated:
Cryptocurrencies, including Bitcoin, are not even considered an asset class. They cannot provide cash flow like bonds, do not generate revenue through global economic growth, fuel Ponzi schemes and money laundering, and cannot provide inflation hedging capabilities like gold.
Almost a year later, in March, Goldman Sachs applied to launch Equity Linked Notes (ELN) tied to the "ARK Innovation ETF" fund managed by Ark Invest.
By the end of March, they announced plans to offer Bitcoin and other investment products to high-net-worth clients, potentially through Bitcoin spot, derivatives, or traditional investment tools, providing comprehensive investment services for Bitcoin and digital assets.
Bitcoin was once again in the spotlight during a conference call on the 14th, where Goldman Sachs CEO David Solomon pointed out that cryptocurrencies like Bitcoin are gaining significant attention, and market participants are evaluating their potential as a store of value.