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Institutional Perspective | BlackRock's CIO States: Bitcoin Will Continue to Exist and Become an Alternative to Gold

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Institutional Perspective | BlackRock

Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock, stated in an interview with CNBC yesterday that Bitcoin will continue to exist and become an alternative to gold.

Bitcoin Will Continue to Exist and Become an Alternative to Gold

In an interview, Rick Rieder stated that while he is not a believer in Bitcoin and has not invested too much in cryptocurrencies in corporate and company portfolios, he believes that cryptocurrencies (especially Bitcoin) will continue to exist and become an alternative to gold:

"It's hard to say whether it's worth buying at the current trading price. But, do I think it's a lasting mechanism? Can it largely replace gold? Yes, I think so, because in terms of the function of transmitting value, it is much more useful than gold bars."

Rick Rieder also mentioned that the acceptance of this asset by young people and the technology itself are unquestionably real.

"Central banks are developing digital currencies, and the 'acceptance' of technology and cryptocurrencies by the millennial generation is real, as are digital payment systems."

Bitcoin is called "digital gold" for its unique value storage properties. Supporters of Bitcoin believe that as more investors realize its value, Bitcoin will eventually catch up to the market value of gold.

Source: buybitcoinworldwide.com

BlackRock and Bitcoin

In the history of Bitcoin over the past decade, 2020 was a major turning point. Institutional investors who have long been skeptical of cryptocurrencies have changed their minds and accepted the feasibility of Bitcoin as a store of value. Legendary fund managers like Paul Tudor Jones and Stanley Druckenmiller have turned their attention to Bitcoin, and major banks such as Citigroup and JPMorgan are increasingly interested in Bitcoin. It can be said that the rise of Bitcoin this year is largely driven by institutional investors, fundamentally different from the bull market of 2017.

On the other hand, BlackRock is actually a shareholder of MicroStrategy, a publicly traded company that previously invested $425 million in Bitcoin, with a reported stake of about 15.24%. The decision by MicroStrategy to convert most of its cash reserves into Bitcoin was likely supported by BlackRock. In other words, while Rick Rieder is reserved about the price of Bitcoin, BlackRock still seems to have a certain level of confidence in the value of Bitcoin.