BlackRock CEO Larry Fink attributed a rally on Bitcoin that occurred Monday to a “flight to quality,” or an attempt to put liquid funds in something perceived to be a secure longer-term investment amid inflation and war.
“I think the rally today is about a flight to quality, with all the issues around the Israeli war now, global terrorism, and I think there’s more people running into a flight to quality, whether that is in treasuries, gold, or crypto depending on how you think about it. And I believe crypto will play that type of role as a flight to quality.”
When asked what he thinks would happen to markets if a “hot war” broke out, Fink said he expects negligible change if the war is kept to a ground invasion by Israel into Gaza. He added he thinks it’s unlikely much will happen unless there is some seismic shift in oil politics, but countered the assumption that that will happen due to the “resilience” of the market.
JUST IN: BlackRock CEO Larry Fink says crypto will play a role as a flight to quality. pic.twitter.com/epxg0xx95g
— Watcher.Guru (@WatcherGuru) October 16, 2023
To explain why the market has seemed so resilient to the wars in Ukraine and now Israel, Fink pointed to investors’ optimism about the progress of technology in fields like artificial intelligence. He also said in a head-scratching claim that AI would create “more jobs and more factories” in the U.S.
“There is a strong fundamental belief that technology is going to raise the value of financial assets, because it’s going to increase and enhance productivity. If you look at productivity in our world today, productivity has fallen especially during COVID. And for countries that have declining populations, declining demographics, technology can play a really incredible role.”
Fink also praised developments in pharmaceuticals, including life-extending drugs set to treat dementia and other maladies.
He also surmised that the Federal Reserve would increase interest rates one more time to clamp down on inflation, especially because of expected increased defense spending.
In June, BlackRock filed with the Securities and Exchange Commission (SEC) for a Bitcoin exchange-traded fund, or ETF, which is a pooled investment in a given commodity that can be traded on the market like a stock. Essentially, BlackRock is opening up a way for its customers to bet on Bitcoin.
BlackRock’s “iShares Bitcoin Trust,” which has not yet been approved by the government, intends to use Coinbase Custody as its custodian. Other firms like Fidelity, Invesco, Grayscale, and CBOE have also been trying to launch Bitcoin related ETFs.
During the Fox Business segment, the host covered story about a 10 percent spike in Bitcoin (BTC) Monday morning that occurred due to an incorrect report from Coin Telegraph that the SEC had approved of the iShares Bitcoin Trust. Fox confirmed with BlackRock that that was not the case and Coin Telegraph retracted their story. Fink brushed off this story as a mere fluke, bringing up his “fight to quality” theory in response. But he was no doubt pleased that the mere rumor of the launch of his firm’s new ETF caused a leap in value.
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