Blackrock’s head of global fixed income investments, the world’s largest asset manager, says bitcoin and crypto they are durable goods. “I think a healthy recalibration is underway,” she said, noting that “if you look in two or three years, they will be higher than today.”
Blackrock’s Bitcoin and Crypto Executive
Rick Rieder, chief investment officer (CIO) of Blackrock’s global fixed income, shared his views on bitcoin and cryptocurrencies in an interview with Yahoo Finance Live on Thursday. On the same topic: Top 3 Bitcoin, Ethereum and Ripple Price Predictions: Cryptocurrencies Prepare for Recovery after Punishing Early Buyers. Blackrock is the largest wealth manager in the world with approximately $ 10 trillion in assets under management (AUM).
Mr. Rieder was asked how the cryptocurrency market will react when the Federal Reserve begins to tighten rates aggressively. The Fed raised its policy rate by 75 basis points this week, the largest increase since 1994.
The CIO explained: “I think people underestimate. When you leave rates at such low levels for so long … when you hold the policy too easily, the leverage builds up in the slash system “how can I get the yield quickly” – and you see much of the leverage that is built around cryptography is unfolding fairly quickly. “
I still think bitcoin and cryptocurrencies are sustainable assets. It’s a sustainable business, but so many excesses have been built around it.
describes Rieder: “It’s not that different from the Internet bubble… if you go back to the 99 and 2000s, was the Internet a bad idea? No, it wasn’t a bad idea. But you’ve created so much excess around him and you just have to disengage that dynamic, and I think that’s what we’re seeing today. He observed: “Markets are falling five times faster than they are going up… That’s why you’ve seen this incredible relaxation. “
While reiterating that he still believes that bitcoin and cryptocurrencies are sustainable assets that “will continue”, the Blackrock executive said:
I think there is a healthy recalibration going on. The question is how far this recalibration will go.
When asked about the prices of major cryptocurrencies, he admitted that for cryptocurrencies: “It’s hard enough when there is no real intrinsic value. So what is it worth? It is worth what the next person will pay. “
And he continues: “My feeling is that in all these situations you are going over the edge, and my opinion is that you probably have some downside from there. But it’s hard to say what the fair value is. ”Blackrock’s Chief Investment Officer added:
My feeling is that, like many assets, if you look in two or three years, they will be higher than today.
“But it could be passed on the downside. It’s hard to understand, just like gold, because I can’t figure out the multiple of my free cash flow and what my security is underneath it, ”she concludes.
Rieder has made some pro-bitcoin comments in the past. In November 2020, he said cryptocurrencies are here to stay, pointing out that bitcoin could replace gold. He also stated that BTC is “much more functional than the circulation of a gold bar”. In September of last year, he revealed that he has “a small piece of bitcoin”, noting: “I like assets that are volatile and have an upward convexity. I could see bitcoin increase significantly.”
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