The recent surge in Bitcoin’s value has hit a pause in the past few months, following a meteoric rise as we entered 2024 (though one prominent Wall Street firm has subtly indicated it may climb again soon).
Bitcoin’s price has retraced from a 2024 peak of over $70,000, which it reached amid significant excitement surrounding BlackRock’s spot bitcoin exchange-traded fund (ETF)—a development that led BlackRock CEO Larry Fink to issue a “crazy” warning regarding the Federal Reserve just last week.
As MicroStrategy’s Michael Saylor shares his $100 trillion “end game,” Fink has also articulated his vision for bitcoin, ethereum, and the broader crypto landscape—suggesting that the “digitizing of the dollar” will soon be a topic of conversation.
“We view bitcoin as a distinct asset class, serving as an alternative to other commodities like gold,” stated Fink during BlackRock’s third-quarter earnings call. He foresees bitcoin, ethereum, and crypto merging with artificial intelligence technologies.
“Consequently, I believe the scope for this type of investment will increase. Additionally, the potential for ethereum as a blockchain technology can surge considerably. If we can enhance acceptance, transparency, and analytical capabilities related to these assets, growth is inevitable.”
Bitcoin and ethereum, facilitated by new crypto ETFs that provide exposure to crypto without the challenges of exchanges or self-custody, have contributed to BlackRock’s assets under management climbing above $11 trillion for the first time in the third quarter. BlackRock’s IBIT has enjoyed $21.7 billion in net inflows since January, far exceeding Fidelity’s secondary spot bitcoin ETF, which has attracted $10 billion in inflows, according to SoSoValue data.
“The launch of bitcoin ETFs by major players like BlackRock and Fidelity, along with their marketing efforts directed at institutional and individual investors, is very encouraging,” remarked Anthony Scaramucci, founder of hedge fund SkyBridge Capital, as he set a bitcoin price target of $170,000 in a recent interview with investment platform Saxo.
The introduction of numerous spot bitcoin ETFs on Wall Street this year marked the initial phase of what Fink has termed a digital “revolution,” coinciding with his announcement of BlackRock’s ambitious crypto strategy—aiming to develop a groundbreaking, blockchain-based alternative to the U.S. dollar.
“I firmly believe we will witness a broadening market for digital assets,” Fink stated, referencing BlackRock’s historical involvement in the mortgage sector’s growth alongside advancements in data and analytics. “As we enhance analytics, we’ll observe how each nation addresses its own digital currency. This is a fundamentally different asset compared to bitcoin. However, I am confident that we are on the verge of transformative developments as we refine our analytical capabilities.”
Fink acknowledged the successful attempts in India and Brazil to create digital currencies as “remarkable achievements.”
“How will we assess the digitization of the dollar in [the U.S.]? What implications will this carry?” Fink inquired. “This introduces a distinct question, separate from bitcoin and similar assets. Nonetheless, all these discussions are forthcoming.”
The conversation surrounding a digital dollar, or central bank digital currency (CBDC), gained momentum in 2019 after Facebook (now Meta) disclosed its plans to launch a bitcoin-inspired digital currency, which was ultimately halted by regulators.
The notion of a digital dollar, often likened to China’s widely used digital yuan, raises privacy issues and concerns regarding its potential effects on the existing commercial deposit-driven financial system.
Federal Reserve Chairman Jerome Powell emphasized that the Fed would not pursue a digital dollar without explicit approval from Congress.
