The chief investment officer of global fixed income at Blackrock, the world’s largest asset manager, says bitcoin and crypto are durable assets. “I think there’s a healthy recalibration going on,” he said, noting that “if you look two to three years from now, they’re going to be higher than today.”
Blackrock’s Manager at Bitcoin and Crypto
Rick Rieder, chief investment officer (CIO) of global fixed income at Blackrock, shared his views on bitcoin and cryptocurrency in an interview with Yahoo Finance Live on Thursday. Blackrock is the world’s largest asset manager with approximately $10 trillion in assets under management (AUM).
Rieder was asked how the crypto market will react when the Federal Reserve begins to tighten aggressively. The Fed increased its benchmark rate by 75 basis points this week, the largest increase since 1994.
The CIO explained: “I think people take it lightly. When you leave interest rates this low for such a long time … you keep the policy too easy, the system gets leveraged and the ‘how do I catch the payback fast? Built around crypto, it resolves pretty quickly. ”
However, he emphasized:
I still think bitcoin and crypto are durable assets. It’s a tough job, but there was a lot of redundancy around it.
Rieder explained: “Not so different from the internet bubble… If you go back to ’99 and 2000, was the internet a bad idea? No, it wasn’t a bad idea. But you’ve created a lot of redundancy around it and you just have to break that dynamic and I think we’re seeing that today.” He stated: “Markets are falling five times faster than they’re rising… That’s why you’ve been seeing this incredible easing.”
While reiterating that he thinks bitcoin and crypto are still durable assets that “will go on,” the Blackrock executive commented:
I think it’s a healthy recalibration going on. How far this recalibration will go is a question.
When asked about the prices of major cryptocurrencies, he admitted for crypto: “It’s pretty tough when there’s no real intrinsic value. What is its value? It’s worth what the next person will pay. ”
He continued: “In all of these cases, in my opinion, you’re overstepping the line and my guess is you have some downsides to get out of here. But it’s hard to say what the fair value is.” Blackrock chief investment officer also shared:
My feeling is like most beings, if you look two or three years from now, they will be higher than today.
“But on the downside it could be overkill. “It’s hard to understand, just like gold, because I can’t work out the multiples of my free cash flow and what my security is underneath that,” he said.
Rieder has made some pro-bitcoin comments in the past. In November 2020, he said that the cryptocurrency is here to stay, noting that bitcoin could replace gold. He also said that BTC is “much more functional than overhauling a bullion.” In September last year, he announced that he has “a small piece of bitcoin”: “I like assets that are stable and have upward convexity. I could see Bitcoin rising significantly.”
What do you think of the comments from Blackrock’s chief investment officer? Let us know in the comments section below.
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