The head of global fixed income investments at Blackrock, the world’s largest asset manager, says bitcoin and crypto are fixed assets. “I think there is a healthy recalibration going on,” he said, noting that “if you look at two or three years from now, they will be higher than today.”
Blackrocks Bitcoin and Crypto Executive
Rick Rieder, Chief Investment Officer (CIO) for global interest rates at Blackrock, shared his views on bitcoin and cryptocurrencies in an interview with Yahoo Finance Live on Thursday. On the same topic: Top 3 Bitcoin, Ethereum, Ripple Price Predictions: Cryptocurrencies Prepare for Recovery After Punishing Early Buyers. Blackrock is the world’s largest asset manager 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 interest rates aggressively. The Fed raised its benchmark rate by 75 basis points this week – the largest increase since 1994.
The CIO explained: “I think people underestimate. When you leave interest rates at such low levels for so long … when you keep the policy too easy, leverage builds up in the slash system ‘how do I capture returns quickly’ – and you see a lot of the leverage that has been built around the crypto unraveling pretty quickly. ”
I still believe that bitcoin and crypto are sustainable assets. It is a sustainable business, but there has been so much profit built around it.
describes Rieder: “It’s not much different from the internet bubble … if you go back to the years 99 and 2000, was the internet a bad idea then? No, it was not a bad idea. But you have made so much profit around him, and you just have to unleash that dynamic, and I think that’s what we’re seeing today. of. »
While reiterating that he still believes bitcoin and crypto are sustainable assets that will “continue”, the Blackrock director believed:
I think there is a healthy recalibration going on. The question is how far this recalibration will go.
Asked about the prices of major cryptocurrencies, he admitted that for crypto: “It’s quite difficult when there is no real intrinsic value. So what’s it worth? It’s worth what the next person will pay.”
He continues: “My feeling is that in all these situations you go over the edge, and my opinion is that you probably have some disadvantages 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 can be exceeded on the downside. It’s hard to understand, like gold, because I can not figure out the multiple of my free cash flow and what my security is below it,” he concludes.
Rieder has previously made a few pro-bitcoin comments. In November 2020, he said cryptocurrencies are here to stay, noting that bitcoin could replace gold. He also said that BTC is “so much more functional than circulating a gold bar.” Last September, he revealed that he had “a small piece of bitcoin”, noting: “I like assets that are volatile and have upward convexity. I could see bitcoin rising markedly.”
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