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BlackRock Cites Runaway US Debt, Touts Bitcoin as a Viable Solution
- BlackRock recently described Bitcoin as a unique diversifier that provides strong returns and is uncorrelated with traditional financial risks.
- According to a Forbes report, BlackRock is raising alarms about the US’s $35 trillion debt, suggesting Bitcoin as a potential safeguard for investors.
- CEO Larry Fink emphasised the necessity of economic growth to manage deficits, hinting at Bitcoin as part of the solution to minimise public deficit impacts.
- The firm’s move into Bitcoin, including SEC-approved options trading for their IBIT fund, signals a broader acceptance and integration of digital assets.
Last week, BlackRock released a report in which it called Bitcoin a “unique diversifier”, something which offers solid ROI (return on investment) while remaining uncorrelated to traditional financial risk.
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Now, as per a Forbes report, the world’s largest asset manager is warning investors of “growing concerns” over rising US debt. BlackRock believes the US$35 trillion (AU$51.3 trillion) in debt will lead investors to put their money into Bitcoin.
On The Growing US Debt Problem
Earlier in July, CEO Larry Fink, warned that the US must get the economy’s growth back on track or risk creating an enormous burden for future generations.
We need to grow, and if we can’t grow out of it these deficits are going to become a big burden. We’re going to really be putting on the backs of our children and our grandchildren a real burden of these massive, massive spends that we can’t afford.
Larry Fink Speaking to Fortune, Fink said the best way to address this is by supporting business growth, adding, “we can’t rely on public deficits anymore”.
The U.S. deficits are the largest in the world—growing at the fastest rate in the world—and we need to be finding ways to minimize the role of the deficit on the economy, on interest rates, on inflation.
Larry Fink Fink, BlackRock: Bitcoin Fixes That
Both Fink and the recent report point to Bitcoin as a solution for these growing problems, which perhaps explains BlackRock’s push into the digital asset world.
Just recently they received the green light from the US Securities and Exchange Commission (SEC) to list and trade options on their IBIT fund.
Neil Jacobs, former head of brand engagement at Swan, wrote on X, that the approval of options trading on the BlackRock Bitcoin ETF is significantly bullish for Bitcoin, primarily due to increased institutional involvement and improved market liquidity.
This move not only facilitates better price discovery and signals mainstream acceptance, but also diversifies the financial products available to investors, encouraging a broader, more sustained interest in Bitcoin.
BlackRock Not Only Player Keen on Some Bitcoin Action
Of course, we focused a lot on BlackRock here, because they are such an important part of the financial world. But others are also voicing their interest, for example Jan Van Eck, the CEO of another financial heavy-hitter, VanEck.
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Speaking to Fox Business recently, the CEO said that his firm is also very bullish on BTC, seeing it “growing up” and eventually hitting half the market cap of Gold – meaning the number one digital asset would carry a hefty price tag of US$350,000 (AU$513,700).
Not bad for an asset that’s just coming-of-age.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
