BlackRock's Global Chief Investment Officer discusses factors influencing Bitcoin adoption and its potential as an asset.
BlackRock is considering increasing its exposure to Bitcoin, but several factors, including adoption and public trust, must be addressed first, according to Rick Rieder, BlackRock’s Global Chief Investment Officer of Fixed Income, in an interview with WSJ. Rieder manages $2.6 trillion in fixed-income assets at the world’s largest asset management firm.
“I think time will tell whether it becomes a significant part of the asset allocation framework. I believe that over time, people will become more and more comfortable with it,” Rieder said.
Rieder thinks people will warm up to Bitcoin, citing BlackRock’s spot Bitcoin exchange-traded fund (ETF) as crucial for increasing accessibility and making Bitcoin easier to manage.
“Currently, it’s quite volatile, and we use it when we see potential upside, more like an option on something. If there is increasing receptivity, we now have more vehicles that people can use to become more comfortable with owning, buying, selling, and liquidating it,” Rieder explained.
Bitcoin is becoming a more prevalent topic in investment discussions, according to him, but it might need further development before becoming a mainstream asset allocation choice for most individuals.
Rieder views the growing adoption of Bitcoin as a significant driver of its future value. He believes that as more people use and invest in Bitcoin, its potential for significant growth becomes more achievable, as shown by recent price increases.
“As more and more people adopt it as an asset, we believe the upside potential is real, as has been evidenced recently.”
BlackRock’s recently launched spot Bitcoin ETF currently holds approximately $5.6 billion worth of Bitcoin, as per data from iShares Bitcoin Trust. Larry Fink, BlackRock’s CEO, sees both Bitcoin and Ethereum ETFs as critical steps toward tokenization, with the firm seeking approval for a spot Ethereum ETF.