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- Larry Fink talks about Bitcoin and crypto assets emerging as safe havens amidst the ongoing banking crisis.
- BlackRock CEO is optimistic about asset tokenization and thinks crypto payments will gain momentum in the future.
Last week on March 15th, Larry Fink, CEO of BlackRock – the world’s largest asset manager – released his annual letter to shareholders. In the letter, Fink discusses recent developments with the collapse of Silicon Valley Bank and the changing risk environment for investors around the world.
He explains how global financial dynamics are shifting and what the future of investing looks like. In the section dubbed “Digital Assets,” BlackRock’s CEO outlines three main conclusions for crypto investors.
1.Bitcoin (BTC)
As the banking crisis unfolds in the United States and across Europe, the world’s largest cryptocurrency Bitcoin (BTC) has been on everyone’s radar. Over the past week, Bitcoin’s price has gained more than 27 percent, jumping past the $28,000 level for the first time since June 2022.
As a major crack appears in the global banking system, Bitcoin (BTC) continues to be on investors’ radar today. Moreover, amid intense inflationary pressures, Bitcoin is emerging as a safe haven to protect investors’ savings.
However, Larry Fink isn’t all praise for Bitcoin right now. In his annual letter, Fink hinted that investors are paying too much attention to Bitcoin amid other interesting developments taking place in the crypto sector. The CEO of BlackRock specifically noted the “media obsession with Bitcoin”.
BlackRock has been dabbling in the crypto space for a while now. Last year in 2022, BlackRock joined hands with Coinbase to enable its institutional clients to handle and trade Bitcoin, Ethereum and other digital assets. Apart from that, the biggest asset managers are also continuing several internal projects in the crypto and blockchain space.
Although at one point BlackRock was skeptical of crypto, it seems to have moved past it and is finally seeing some value in the asset class.
2. Asset Tokenization
This is another area where Larry Fink places strong emphasis. While asset tokenization may not be very attractive to crypto investors, it is quite attractive to traditional financial players.
Asset tokenization basically means converting real-world financial assets into digital assets available for trading and storage on blockchain platforms. Some examples are tokenized stocks and bonds. As per BlackRock, asset tokenization will make asset management work easier. Moreover, tZERO is one of the top asset tokenization platforms currently in the world.
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For someone looking to gain direct exposure to the crypto sector, one investment target could be the Avalanche blockchain Layer 1. This blockchain platform is at the forefront of tokenizing financial assets and then placing them on the Avalanche blockchain.
3. Crypto Payments
Crypto payments have yet to take off in mainstream finance but Larry Fink touches on this topic in his letter. Fink believes the US is lagging behind other countries in adopting crypto as a buying tool for everyday purchases. However, he thinks the trend of crypto payments could really pick up in developing countries going forward.
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