A senior executive at BlackRock, the world’s largest asset manager, said bitcoin is now firmly entrenched in the global financial system and will eventually replace gold as a superior store of value.
Rick Rieder is the latest in a series of high-profile U.S. executives and investors to get excited about crypto recently. Others include CEOs Michael Saylor of MicroStrategy and Jack Dorsey of Twitter and Square, and Wall Street heavyweights Bill Miller, Stan Druckenmiller and Paul Tudor Jones.
Rieder, BlackRock’s CIO of fixed income, told CNBC on Friday: “Bitcoin is here to stay.”
Without going so far as to say that he is now a Bitcoin bull, Rieder said that the best crypto “will largely replace gold … it’s more functional than passing a bar of gold.”
As Asia Times has reported in the past, bitcoin is increasingly viewed in investment circles as “digital gold” due to its unique store-of-value properties. Proponents of decentralized digital currency believe that a portion of the market capitalization of gold will be required as investors realize its distinct advantages.
Companies hold 4.54% of the total bitcoin supply, which equates to around $ 15.3 billion at current prices, according to estimates, and they are now recovering it faster than it is mined. which some analysts say will lead to a supply crunch at some point, putting significant upward pressure on the price.
Although BlackRock does not own physical bitcoin, it has indirect exposure to crypto through its stake in business intelligence firm MicroStrategy, which transferred most of its corporate cash into bitcoin earlier this year. year. After buying its bitcoin in the $ 10,000 price range, MicroStrategy profited greatly, prompting other companies such as Square to follow suit.
Deutsche Bank is another household name to compare bitcoin to gold this week.
“There seems to be a growing demand for the use of bitcoin where gold was used to hedge dollar risk, inflation and other things,” said Jim Reid, Managing Director, Head of Strategy Department German investment bank’s global fundamental credit fund, according to ZeroHedge.